Meta’s stock rose 15% in a single week, its best since early 2024. That was enough to turn a year-to-date loss into a gain of about 2%.
It still trails the Nasdaq, which is up roughly 13% this year. And investors have reason to be wary. When Meta lifted its 2026 capital spending guidance to $125 billion to $145 billion in April, the shares fell 7%.
Three announcements in one week
This week the company opened its AI models to outside developers for the first time. Its Meta Model API lets them build on Muse Spark 1.1, a model that handles coding, tool use, text, image and video understanding, and chained agentic workflows. It puts Meta in direct competition with OpenAI and Anthropic.
The second piece is hardware. Iris, Meta’s in-house AI chip, goes into production in September. Broadcom co-developed it and TSMC will make it.
The third is capacity. Meta is aiming for 7 gigawatts of compute this year and double that by 2027, through clusters named Prometheus and Hyperion. Bank of America’s Justin Post said Meta “may have engineered significant cost savings to get capacity cost per MW well below our and Street expectations.”
What is still unproven
The developer market is crowded. OpenAI, Anthropic and Google already have established ecosystems. Whether Iris lowers Meta’s costs enough to let it undercut rivals on price and win real share has not been shown.
The test will come with free cash flow figures. If revenue from AI services grows fast enough to cover spending that could pass $150 billion, the payoff would vindicate Mark Zuckerberg’s habit of big bets. Until then, trailing the Nasdaq by 11 points this year suggests the market wants results.
Sources
- Meta's Best Stock Week Since 2024 – Wall Street Buys In – Zuckerberg’s AI Pivot Paid Off in Billions
