Meta Platforms Inc. (NASDAQ:META) shares jumped approximately 6% in Friday trading, making it the top performer among the Magnificent 7 stocks. The rally extended a strong week, with the stock on track for its eighth gain in the last ten sessions and its best weekly performance since mid-April. Friday's move also pushed Meta above its 200-day moving average for the first time in over two months, a technical signal that often attracts momentum-focused investors.
AI Infrastructure Plans Boost Sentiment
Investor optimism was fueled by a Reuters report that Meta plans to begin manufacturing its custom-designed AI chip, codenamed "Iris," in September. This initiative is part of Meta's broader strategy to scale its AI infrastructure amid intensifying competition among hyperscalers. Following the report, BofA Securities reiterated its Buy rating and $835 price target on Meta. The brokerage now estimates Meta will spend about $22 billion per gigawatt of computing capacity in 2026, less than half its prior estimate of $45 billion. BofA noted that building AI infrastructure for under $30 billion per gigawatt could offer more attractive economics compared to Amazon and Google's estimated annual cloud revenue of $10 billion to $16 billion per gigawatt. For context on how AI chip developments affect other players, see our analysis on Nvidia's 2% rise as Meta's custom AI chip is seen as a complement, not a threat.
Muse Spark 1.1 Strengthens Meta's AI Push
Meta also unveiled Muse Spark 1.1, describing it as its most capable AI model yet for coding and agentic tasks. The release follows the original Muse Spark model from April and signals a more aggressive push to compete with OpenAI and Anthropic in AI-powered coding tools. Citizens highlighted the launch as a significant step in Meta's AI strategy, reinforcing expectations for continued growth in AI computing demand despite execution risks. Meta's chief AI officer, Alexandr Wang, showcased the model's capabilities on X, calling it an "industry-competitive agentic and coding" model with strong tool use, a million-token context window, parallel subagents, and advanced computer-use features. Referring to a review by SemiAnalysis, Wang noted that "Meta is the only hyperscaler/neolab on track to be world-class at all three [data, talent and compute] and therefore has the best chance at catching up with Anthropic/OpenAI." He also confirmed additional releases are planned, writing, "Indeed, more to come!"
AI Race Continues to Drive Meta Shares
The recent gains reflect growing investor confidence that Meta is accelerating its AI strategy through investments in computing infrastructure, custom silicon, and foundation models. While OpenAI and Anthropic introduced coding-focused AI models earlier, Muse Spark 1.1 signals Meta's intention to compete more aggressively in the rapidly expanding AI coding market. With multiple AI initiatives announced in recent days and Wall Street maintaining a constructive outlook, Meta shares have continued to outperform as investors bet the company's investments in infrastructure and AI products will support future growth. For broader market context, see how Dow gains 70 points amid SK Hynix's $26.5B Nasdaq listing and Iran tensions.
This article is for informational purposes only and does not constitute financial advice.
