Meta Stock Logs Best Week Since Early 2024 as AI Blitz and In-House Chip Plans Ignite Rally

After months of choppy trading and growing skepticism over the returns on its massive AI spending, Meta Platforms (META) decisively flipped the narrative this week with a string of major AI product launches and a concrete update on its in-house chip efforts. The stock closed Friday, July 10, at $669.21, up 5.97% from the prior close of $631.48, for a weekly gain of roughly 15% — its best since early 2024. (U.S. markets were closed for the weekend; the quote reflects the last trading session.) The rally not only erased Meta's year-to-date losses but also added more than $12 billion to CEO Mark Zuckerberg's personal fortune in a single day.

AI Model Blitz: From Image Generation to Agents

Meta’s AI cadence was relentless this week. On Tuesday (July 7), it unveiled Muse Image, a new model focused on image generation aimed at creators and advertisers, part of a broader push into AI subscription services.^[CNBC] Then on Thursday (July 9), it dropped Muse Spark 1.1, a major upgrade to its foundational AI model that Meta says delivers better performance on coding, using software tools, and understanding text and images — targeting agent and coding workloads.^[CNBC] The releases signal Meta is aggressively stepping up its game in the AI model race, looking to close the gap with earlier movers like OpenAI, Anthropic, and Google (GOOGL).^[CNBC]

In-House 'Iris' Chip to Mass-Produce in September

Beyond software, Meta’s push for hardware autonomy was another major catalyst. Reuters reported that Meta plans to start production of its in-house AI chip, codenamed "Iris," in September as part of its data center expansion, aiming to hit 14 gigawatts of compute capacity next year.^[CNBC] The news drew positive notes from Wall Street. Bank of America analyst Justin Post wrote in a report that "Meta may have achieved significant cost savings, making its per-megawatt capacity cost far lower than we or the Street expected."^[CNBC] Meta first outlined its custom AI chip plans in March as part of its data center buildout.^[CNBC]

Cloud Business and the 'Meta Compute' Strategy

This week’s rally also built on earlier reports that Meta plans to launch a cloud business. CNBC’s Jim Cramer had previously argued that if Wall Street believed Meta could generate revenue from its massive AI investments, the stock could pop 18%.^[CNBC] After Meta confirmed its cloud plans on July 1, the stock began its current run.^[CNBC] Some market observers have dubbed this strategy "Meta Compute," where Meta leverages its massive ad business cash flow to build its own "sovereign-scale" computing infrastructure, gradually reducing reliance on third-party GPU rentals.^{[24/7 Wall St.]} This "vertical empire" model stands in stark contrast to "neutral GPU landlords" like CoreWeave (CRWV). Data shows Meta generated $12.386 billion in free cash flow in Q1 2026, while CoreWeave posted negative free cash flow of -$4.711 billion.^{[24/7 Wall St.]} If Meta successfully monetizes its excess compute capacity, it would pose a direct challenge to CoreWeave’s business model.

Muse Image Sparks Privacy Backlash

Not all the news around Meta’s AI was positive. The new Muse Image tool sparked a strong backlash over its privacy policy. The tool allows users to create AI-generated content based on images from public accounts, and users are automatically "opted in" to the program without notification.^[Forbes] SAG-AFTRA, the major Hollywood union representing over 160,000 actors and entertainment professionals, urged its members to opt out of the tool late Thursday.^[Forbes] Talent agency Creative Arts Agency called on Meta to make the feature opt-in instead.^[Forbes] Cybersecurity firm Malwarebytes warned the tool could be used for "impersonation, scams, or other abusive behavior."^[Forbes] In response, Meta said in a statement that users under 18 have been automatically opted out and that it will take action against content violating its community standards.^[Forbes]

Earnings on Deck: AI ROI in Focus

Despite the strong week, Meta’s stock remains well below its all-time high of $796.25 set in August 2025.^{[Forbes Australia]} Attention now turns to Meta’s quarterly earnings report due at the end of July. BNP Paribas analyst Nick Jones said investors will focus on the scale of spending on AI products and whether the planned cloud business can become a meaningful new revenue stream.^{[Forbes Australia]} According to FactSet, the market expects Meta’s quarterly revenue to grow nearly 7% sequentially, but EPS is forecast to fall 31%, partly because Q1 EPS of $10.44 included an $8 billion one-time tax benefit.^[Forbes] Meta previously raised its full-year 2026 capex guidance to between $125 billion and $145 billion.^[CNBC] On the earnings call, management’s commentary on H2 AI infrastructure spending and whether the cloud business has secured any paying customers will be key to judging whether Meta’s AI strategy can deliver.^{[Forbes Australia]}

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