Meta Surges 15% in Best Week Since Early 2024 on AI Momentum

Meta Platforms stock closed at $669.21 on July 10, capping a 15% weekly gain, the company’s strongest five-day performance since early 2024. The rally reflects investor optimism around CEO Mark Zuckerberg’s artificial intelligence strategy, which includes new AI models priced far below competitors and plans to manufacture custom chips starting September 2026.

Three AI announcements drove the week’s surge

Meta released Muse Image, an AI image generation tool, on July 7, followed by upgrades to its Muse Spark model two days later. On July 9, the company unveiled Muse Spark 1.1, designed for agentic and coding workloads. The new model costs just $0.26 per task, making it one of the cheapest frontier AI models available, compared to Claude Opus at $1.80 and GPT-5.5 at $0.88.

Custom Iris chip production begins this fall

Meta plans to begin manufacturing its custom AI chip, code-named Iris, in September 2026 as part of its data center expansion. The company targets 7 gigawatts of computing infrastructure by year-end 2026, scaling to 14 gigawatts by 2027. Bank of America analyst Justin Post noted that Meta may have engineered significant cost savings, with capacity cost per megawatt well below Street expectations.

Cloud business exploration signals new revenue stream

CEO Zuckerberg said exploring an AI cloud business makes sense, according to Bloomberg. This would put Meta in direct competition with Amazon Web Services, Microsoft Azure, and Google Cloud. Selling excess computing capacity and proprietary AI models could diversify revenue beyond advertising and justify the company’s $145 billion capital expenditure guidance for 2026.

Stock valuation and technical signals show mixed picture

Meta trades at a P/E ratio of 21.88 with a Meyka grade of B and a 12-month price forecast of $739.76. The RSI sits at 66.14, nearing overbought territory, while the CCI at 194.77 signals overbought conditions. Analyst consensus rates the stock as a buy, but the valuation premium reflects high expectations for AI monetization that have yet to materialize in earnings.

Final Thoughts

Meta’s week-long rally reflects concrete progress on AI infrastructure and pricing power, but the stock remains priced for execution. With Meyka grading the stock B and forecasting $739.76 over 12 months, investors should watch Q2 earnings on July 29 for proof that AI spending translates to new revenue streams.

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