Track market-moving stories before they get noisy

Shares of Meta Platforms (META +6.16%) climbed about 15% this past week after the social media and cloud computing colossus disclosed some exiting developments.

Image source: The Motley Fool.

Meta wants to make its own AI chips Meta will launch a custom-designed artificial intelligence (AI) chip in September, according to a Reuters. The new chips are part of the cloud giant's plans to increase its computing capacity to 14 gigawatts (GW) in 2027 from a projected 7 GW in 2026.

For context, a ⁠single gigawatt can power roughly 750,000 homes.

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Meta's custom chips are intended to reduce its reliance on chipmakers like Nvidia and Advanced Micro Devices, which have enjoyed tremendous pricing power as demand for their products has outpaced supply.

By making more of its own chips, Meta should be able to reduce its infrastructure costs and alleviate supply constraints. To do so, Meta is reportedly partnering with Broadcom ⁠and Taiwan Semiconductor Manufacturing.

Looking further ahead, Meta hopes to develop upgraded versions of its chips at an aggressive six-month cadence.

Entering the AI coding arena Meta also debuted an upgraded version of its Muse Spark AI model on Thursday.

Muse Spark 1.1 was designed by Meta Superintelligence Labs (MSL) to excel at agentic AI and coding tasks. It's significantly faster than previous versions and can quickly orchestrate multi-agent systems. This means it's well suited to serve as the main agent and delegate work to subagents.

Additionally, Meta says that from a coding perspective, Muse Spark 1.1 is substantially better at diagnosing and fixing bugs.

Taken together, these developments helped to reassure investors that Meta remains at the cutting edge of the AI race.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Broadcom, Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.

By PYMNTS  |  July 12, 2026

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Meta has shuttered an artificial intelligence image creation feature after just three days, following public backlash.

The tech giant last Tuesday (July 7)  introduced a tool that let users generate images using public Instagram accounts. By Friday (July 10), the feature was pulled, after Meta received widespread privacy-related criticism.

“Our intent was to provide a useful creative tool and to give people control over whether their public content could be referenced in this way,” Meta said in a statement shared by Reuters. “We’ve heard the feedback that this feature missed the mark, so it’s no longer available.”

According to Reuters, the feature had faced backlash related to privacy concerns. It had allowed anyone to generate an image of another person by public Instagram username in a prompt. Public accounts had been included by default unless users navigate to a setting to opt out.

As covered here last week, Meta’s own policy states that users “will not be notified about content created using AI features at Meta.”  The opt-out also did not apply retroactively, meaning that images generated before a user turns off the setting remain in the system.

“That distinction matters because most users will not find the setting, and some who look for it on launch day could not locate it at all,” PYMNTS wrote.

“Public photos posted for an audience of followers become reusable inputs for AI generation by strangers, advertisers and Meta’s own ad system without any action required from the account holder. The feature is free to use. The identity data powering it belongs to the people who posted it. Whether they agreed to that use is now a question for regulators in multiple jurisdictions.”

According to the Reuters report, SAG-AFTRA, the union representing actors and other media professionals, urged its members and other Instagram users to opt out of the feature.

“Anything other than a clear and conspicuous opt-in for these types of uses of Instagram users’ images is unacceptable, and an utter miscalculation of public sentiment regarding the obvious dangers and harms inherent in such use,” SAG-AFTRA said.

In the wake of Meta’s decision to remove the feature, a spokesperson for the union welcomed the move, calling it “the responsible thing to do.”

As PYMNTS noted last week, this is happening as Meta faces enormous pressure to show that its AI investments are generating revenue. The company in April forecast AI capital expenditures of $115 billion to $135 billion for 2026, almost double last year’s amount.

Meta Platforms (META +6.16%) is one of the big spenders in the artificial intelligence (AI) race. Its capital expenditures in 2026 will total between $125 billion and $145 billion. At the midpoint, that estimate would be 88% higher than last year's figure.

However, investors have reason to be skeptical that this will result in a meaningful payoff.

CEO Mark Zuckerberg, who currently has a net worth of $231 billion, admitted that the company's AI bets "haven't come to fruition yet." He said that during an internal town hall on July 2, Reuters reported.

The social media stock dipped 5% that day, although it's up 19% in the month of July (as of July 10).

Image source: The Motley Fool.

Not living up to the hype Meta has been one of the fastest companies to commit fully to AI. Earlier this year, the business laid off 8,000 employees, translating to 10% of its workforce. It also moved 7,000 people into different AI roles. One of the goals was to develop and implement AI agents throughout the organization, an objective that so far has failed to live up to expectations.

Zuckerberg said notable progress should be made in the coming months. But based on the immediate negative share-price reaction, investors were less enthusiastic.

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The slow AI headway is giving shareholders flashbacks to late 2021, when the business changed its name from Facebook to Meta Platforms. The company believed that the metaverse would replace mobile internet as the next major computing platform, a strategic pivot that Meta has since scaled back.

Investors haven't been pleased with Reality Labs' financial performance. This segment of Meta posted a cumulative operating loss of $77 billion during the five-year period from the start of 2021 through 2025. But this dollar figure is peanuts compared to the money being allocated to AI.

Zuck's gamble makes sense With a world-class advertising platform and 3.56 billion daily active users across its family of apps, Meta aims to leverage AI not only to boost engagement and drive higher ad revenue, but to also bring personal superintelligence to everyone around the world. This gives the business a different position than its hyperscaler peers, which largely sell AI and other computing capabilities to enterprise clients.

Meta's huge AI spending makes sense, since the company wants to lead the AI revolution from an individual's perspective. However, Zuckerberg's comments about AI progress being slow have three implications for the broader AI secular trend.

It's almost impossible to precisely measure early results from AI implementation, even for a dominant technology business. Worries about AI agents replacing jobs appear to be overblown right now. And no one has any idea what the ultimate payoff will be from the unprecedented AI spending taking place.

On July 1, several media outlets reported that Meta Platforms (META +6.16%) was forming a new business unit, internally dubbed "Meta Compute", to sell its excess AI cloud capacity to third-party customers. Meta will reportedly sell both its raw GPU computing capacity and remote access to its infrastructure to companies so they can run their own AI models.

Shares of CoreWeave (CRWV 0.87%), a leading neocloud provider that provides many of the same services, have dropped nearly 11% since that news broke. Does that pullback represent a buying opportunity or a dire warning for the company's future?

Image source: Getty Images.

Why did Meta's strategic shift crush CoreWeave's stock? Meta's strategic shift surprised CoreWeave's investors, since Meta had just agreed to pay CoreWeave $21 billion through 2032 for its neocloud services this April. Meta also struck a similar multi-billion dollar deal with another neocloud company, Nebius (NBIS +1.60%).

Therefore, it might initially seem odd for Meta to sell its own cloud computing power when it clearly needs it. Meta's agreements with CoreWeave and Nebius also prohibit it from reselling any of that cloud computing power, so it can only sell the excess AI cloud capacity at its own first-party data centers.

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However, Meta plans to invest up to $145 billion this year in expanding its own AI infrastructure. As it builds more data centers, some of those servers will remain idle until they're fully utilized by its social networking platforms and AI services.

To avoid wasting too much cash and energy on underutilized servers, Meta wants to rent them out to third parties -- a move that could transform it into a formidable competitor to companies like CoreWeave and Nebius. CoreWeave's other major customers, such as Jane Street and IBM (NYSE: IBM), could also eventually follow the same playbook if they decide to expand their cloud infrastructure.

On the bright side, CoreWeave's largest customer -- Microsoft (MSFT +0.15%) -- probably won't do the same thing because it's already one of the world's biggest cloud infrastructure companies. Instead, CoreWeave will continue to serve as an "overflow tank" for its cloud services.

Does the pullback represent a buying opportunity? From 2025 to 2028, analysts expect CoreWeave's revenue to surge from $5.1 billion to $40.3 billion as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) soars from $3.1 billion to $25.7 billion. With an enterprise value of $91.2 billion, it still looks like a bargain at 7 times and 13 times this year's revenue and adjusted EBITDA, respectively.

Meta's move is alarming, but it doesn't break the bullish thesis for CoreWeave. Even if Meta sells its idle computing power to cut costs, it doesn't indicate that other companies will eagerly tether themselves to the social media giant's infrastructure. Instead, independent neocloud players like CoreWeave and Nebius should remain appealing choices as the AI market expands -- so this pullback could be a great buying opportunity.

Leo Sun has positions in Meta Platforms. The Motley Fool has positions in and recommends International Business Machines, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.

Shares of Meta Platforms (META +6.16%) rose about 6% on Friday after Reuters reported on Thursday that the social media giant plans to start manufacturing its own data-center AI (artificial intelligence) chip in September. The chip, code-named Iris, was designed with help from Broadcom (AVGO 0.31%) and will be built by Taiwan Semiconductor Manufacturing (TSM 0.55%), according to an internal memo the news organization reviewed.

The market's enthusiasm is easy to understand. Meta expects to spend as much as $145 billion on AI infrastructure this year, and that spending has been my biggest concern with the stock. Custom silicon is aimed squarely at getting more computing power out of every one of those dollars.

So, what does Meta's expanding chip program mean for the stock?

Image source: Getty Images.

The chip program is moving fast Iris is reportedly part of a four-generation family of chips Meta is designing in-house, and the program appears to be ahead of where many investors probably assumed. Testing on the chip took about six weeks and turned up no major issues, according to the memo.

Even more, Meta reportedly plans to launch a new chip about every six months through 2027. That is a much faster cadence than the industry norm of about one new chip per year.

And the infrastructure these chips would support is enormous. Meta plans to bring about 7 gigawatts of computing capacity online this year and double its total to 14 gigawatts in 2027, according to the report, with Iris augmenting the graphics processing units (GPUs) the company buys from Nvidia and Advanced Micro Devices rather than replacing them.

Still, there's a message here for chip investors. One of the AI boom's biggest spenders just showed a credible path to needing Nvidia somewhat less over time -- while handing more business to Broadcom, which helps design the chip, and TSMC, which builds it.

Nvidia's chips remain the backbone of Meta's computing plans. But every in-house chip Meta deploys is pricing pressure Nvidia could eventually feel.

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The business paying the bill None of this spending would matter much to shareholders if Meta's core business were sputtering. It isn't.

Meta's first-quarter revenue rose 33% year over year to $56.3 billion -- an acceleration from 24% growth in the fourth quarter of 2025 and 22% growth for full-year 2025. And the profits followed. The company posted a 41% operating margin for the period, and earnings per share of $10.44 grew 62% year over year, though a one-time $8.03 billion tax benefit added $3.13 per share to that figure. For a company of Meta's size, growth like this is extraordinary.

"We had a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs," said CEO Mark Zuckerberg in the company's first-quarter earnings release.

That growth is what pays for the build-out. In its first-quarter update, Meta raised its 2026 capital expenditure forecast to a range of $125 billion to $145 billion (up from a prior range of $115 billion to $135 billion) while guiding for second-quarter revenue of $58 billion to $61 billion. Capital expenditures in the first quarter alone were $19.8 billion.

Of course, custom chips don't mean a smaller budget. And a reported timeline may still slip. Even if Iris works exactly as planned, Meta isn't cutting its spending. It's doubling its computing capacity and trying to make each unit of that capacity cost less. If the AI investments don't ultimately produce more engagement and better ad economics, in-house silicon may not be enough to offset challenges the company could face down the road.

But the price investors are paying for this story looks reasonable. At about $672 per share as of this writing, Meta trades at about 24 times earnings and about 19 times forward earnings, even though Meta grew revenue 33% last quarter. And unlike a chip supplier, Meta also controls the applications that all of that computing power serves. If the in-house chips deliver even part of the potential savings, the company's heavy spending could convert into earnings growth faster than the market currently expects.

To me, the stock looks attractive here. Sure, Thursday's report probably doesn't lower Meta's AI bill. But it strengthens the case that the company can control the cost of a build-out it was going to attempt anyway.

Image Credits:Jonathan Raa/NurPhoto / Getty Images 4:55 PM PDT · July 10, 2026

Meta has axed a controversial feature that allowed users to modify photos from public Instagram accounts using AI. The feature, which was rolled out earlier this week along with a batch of other AI tools, “missed the mark” and is no longer available, according to the company.

Earlier this week, Meta announced Muse Image, a new AI image generator built by Meta Superintelligence Labs, its dedicated AI unit. Meta promoted one feature that allowed individuals to generate images by @-mentioning public Instagram accounts that they wanted to reference. The feature, which wasn’t designed to alert a user if their photos were used in this way, prompted immediate backlash.

TechCrunch wrote its own guide on how to disable the feature.

Now Meta has reversed course. The company issued a blog post Friday announcing that it was removing the feature. Puck News founding partner Dylan Byers was the first to share the company’s decision.

“Our intent was to provide a useful creative tool and to give people control over whether their public content could be referenced in this way,” the company posted on its blog. “We’ve heard the feedback that this feature missed the mark, so it’s no longer available.”

TechCrunch reached out to Meta for more information and will update this article if it responds.

Since its integration with social media platforms, AI has been misused with wild abandon — often to generate naked images of female celebrities. Platforms have attempted to mitigate this trend, although the guardrails introduced have often fallen short.

In the case of Meta’s newly nixed feature, it seems somewhat obvious that it would have been abused in this way. Indeed, Byers notes that the decision to do away with the feature came “amid scrutiny from users and talent agencies, including CAA.”

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Lucas is a senior writer at TechCrunch, where he covers artificial intelligence, consumer tech, and startups. He previously covered AI and cybersecurity at Gizmodo. You can contact Lucas by emailing [email protected].

It's been a tough year for Meta Platforms (META +6.16%) shareholders. The social media and artificial intelligence (AI) specialist has lagged the broader market, with the stock down 9% over the past year (as of market close on Thursday), compared to 21% gains for the S&P 500.

The biggest headwind has been fears about Meta's significant AI-related spending, as investors fear the costs will squeeze the company's profits and ultimately outweigh the benefits.

However, I believe the sell-off has gone too far. Numerous catalysts could send Meta stock soaring over the past year, and I don't think investors have been keeping track. Let's look at these drivers and why I think Meta Platforms is a screaming buy right now.

Image source: The Motley Fool.

1. Head in the clouds The tech world was rocked last week when rumors surfaced that Meta is developing a cloud infrastructure business, according to a Bloomberg report. This would put the company in direct competition with industry leaders Amazon Web Services (AWS), Microsoft Azure, and Alphabet's Google Cloud.

One of the key advantages for cloud operators, aside from selling on-demand computing capacity, has been the built-in market for selling AI models. Amazon Bedrock, Google Cloud Vertex AI, and Azure AI Foundry give customers access to top-tier AI models and services without the need to spend heavily on underlying infrastructure. This has given the Big Three cloud providers a significant advantage over Meta. If the company develops its own cloud service, that would level the playing field.

Meta has been investing heavily in data centers to support its AI ambitions. Having an outlet to sell excess cloud capacity and peddle its homegrown models would be a boon to Meta and take its AI strategy to the next level.

2. Significantly lower AI infrastructure costs One of the biggest question marks hanging over Meta this year is the company's aggressive AI-related capex spending. In the first quarter, Meta raised its forecast, saying it expects spending to be in a range of $125 billion to $145 billion, up from its previous range of $115 billion to $135 billion. Much of this spending will advance its data center build-out to support its AI ambitions. Some investors fear Meta's spending will outpace the returns from the company's massive investment.

However, Meta's AI infrastructure build-out is much more cost-effective than expected, according to BofA analyst Justin Pope. The company is working to deliver an additional 14 gigawatts (GW) by the end of next year, with 1GW already online. The analyst originally estimated Meta's cost per GW at $45 billion, but an internal Meta memo suggests the cost is closer to $22 billion. If those figures are "even close to accurate, Meta may have engineered significant cost savings" that are well below Wall Street's expectations, according to the analyst.

Moreover, the company has joined forces with Broadcom to develop a suite of Meta Training and Inference Accelerator (MTIA) chips. These specialized processors would be designed to be more efficient for specific tasks, thereby reducing AI-related operating costs. The first of these custom chips, dubbed "Iris," is scheduled to begin production in September, according to reports.

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3. Muse Spark reception After the tepid reception to its Llama 4 AI model last year, Meta took a step back to regroup. Just this week, the company released Muse Spark 1.1, and early reviews suggest the company has a hit on its hands. The latest multimodal AI -- which powers the Meta AI assistant -- offers advanced reasoning and can handle complex processes. The recent update also offers agentic coding, or the ability to write, test, and debug code with minimal human involvement.

While these latest models still lag those from OpenAI and Anthropic, Meta has significantly narrowed the lead with Muse Spark. Moreover, the cost of use is lower than that of the leaders, as CEO Mark Zuckerberg has promised "aggressive" pricing and a "much more affordable cost" for its frontier model. Developers testing Muse Spark will be able to use it for free, though they will be forced to pay beyond a certain use threshold.

The creation of this next-generation AI model catapults Meta into the big leagues, and its aggressive pricing will no doubt attract serious users.

Despite these significant developments and its expanding opportunity, Meta still trades at a discount to many of its Magnificent Seven rivals. The stock is currently selling for less than 23 times earnings (as of market close on Thursday).

That's an attractive price for a company with so many ways to win, which is why I believe Meta Platforms is a screaming buy right now.

Bank of America is an advertising partner of Motley Fool Money. Danny Vena, CPA has positions in Alphabet, Amazon, Broadcom, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Broadcom, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.

Artificial intelligence could reshape the jobs of nearly 80 million workers across Southeast Asia, but the International Labour Organization found little eviden

Investors are bullish on Meta's new low-cost AI pricing and infrastructure plans.

It was another interesting week for the tech trade, as Sam Vadas discusses her top takeaways Meta Platforms' (META) strong run, and SK Hynix's (SKHYV) Nasdaq debut. ======== Schwab Network ======== Empowering every investor and trader, every market day.

Meta Platforms Inc. (NASDAQ:META) shares are gaining Friday. Citizens and Piper Sandler both weighed in on the stock. Here’s what you need to know.

Meta Platforms shares are climbing with conviction. What’s behind META gains? Citizens: A New Revenue Stream Takes ShapeThe firm also sees API revenue as a potential billion-dollar business for Meta on its own. Using Anthropic’s roughly $47 billion annualized revenue run rate as a benchmark, Boone estimates that even a 5% share of a comparable API opportunity would translate to around $2 billion in annualized revenue for Meta.

Piper Sandler: Still the Top Large-Cap PickPiper Sandler analyst Thomas Champion separately reiterated an Overweight rating and held his price target at $800, keeping Meta as his top large-cap pick. Champion cited the combination of durable revenue growth and what he views as an attractive valuation as the foundation of his conviction.

His note flags second-quarter revenue of approximately $61 billion and a third-quarter outlook of $61 billion to $64 billion as the key financial markers to watch heading into earnings, alongside updates on Meta’s capital spending trajectory for 2026 and 2027, the rollout of its Business Agents product on WhatsApp and the expected debut of a new cloud infrastructure business.

META Shares Are FlyingMETA Price Action: Meta shares were up 5.92% at $668.86 at the time of publication on Friday, according to Benzinga Pr.

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Meta Platform's AI efforts are looking like the recipe for a comeback after an almost year-long drought in shares of the $1.7 trillion market-cap company.

Shares of Mark Zuckerberg's social media giant jumped more than 6% Friday to the highest level since April, extending gains that began earlier this month when the company detailed plans to sell access to its AI computing capacity. On Thursday, the company launched Muse Spark 1.1, an AI coding product that will compete with Anthropic and OpenAI. Shares of Meta are flat on the year, while the tech-heavy Nasdaq-100 is up 18%.

Options traders piled in on Friday, with volume on pace for more than three times the 30-day average and 78% of the stock's $1.8 billion in options premium tied to calls, according to data from Cboe LiveVol and SpotGamma. Some of the call-buying was likely offset with selling as well, with as many calls sold as bought, but more than twice as many calls were bought compared to puts, and eight of the top 10 contracts by volume were calls as of midday.

Meta, 1 year

The five most popular trades were all contracts expiring Friday afternoon, looking for a quick extension of early gains. The top trade, the $675 strike call expiring Friday, trades for about $3 per contract and needs Meta to add on another 2% by the bell.

The most actively traded contract expiring after Friday is the July 17 700-strike, a trade that needs a 6% advance to break even.

While bulls dominated the action in the short-term trades, at least one big trader faded the notion of a big swing in either direction. The second-biggest trade of the session was someone selling a total $29 million of both puts and calls at the 670 strike, a bet the stock will stay right where it is for the next two months.

Here’s a look at how much Ackman’s position is up in 2026.

Ackman Buys Meta Stock in Q4Ackman announced the new stake in Meta in an investment presentation in February 2026, before a 13F filing officially unveiled the full size.

In the fourth quarter filing, it was unveiled that Pershing Square Capital Management bought 2,673,569 META shares. That position was later slightly reduced to 2,660,861 shares in the first quarter.

It is unknown the exact date that Ackman bought the shares, but many point to November after Meta’s third-quarter earnings report.

Meta stock traded between $581.25 and $759.19 in the fourth quarter, with the low set on Nov. 19, 2025 and the high set on Oct. 29, 2025.

Based on those prices, Meta stock is down 12.1% from the fourth quarter high and up 14.8% from the fourth quarter lows.

Without knowing Ackman’s exact timeline, we use the end of the fourth quarter to estimate how much the position is up in 2026.

The position ended 2025 worth $1,756,407,737.49. Today, the position is worth $1,776,204,543.33. This means the Meta position is up $19,796,805.84, or nearly $20 million since the start of the year.

Ackman’s Belief in MetaA second-quarter 13F for Pershing Square will come out by Aug. 14 and show whether the hedge fund kept their large position in Meta or changed the position at all.

In February, Ackman shared his bullishness on the Magnificent Seven stock during an investor presentation.

“We believe Meta’s current share price underappreciates the company’s long-term upside potential from AI and represents a deeply discounted valuation for one of the world’s greatest businesses,” Pershing Square said in the presentation. Meta is a “leader in the fast-growing digital advertising space and one of the clearest beneficiaries of AI integration,” it added.

“We believe concerns around META’s AI-related spending initiatives are underestimating the company’s long-term upside potential from AI,” it said.

The presentation highlighted Meta’s 3.5 billion daily active users and a growing user base. An experienced leadership team and the company’s stock multiples are also highlighted as reasons to be bullish going forward.

In recent months, Ackman has increased bullishness on Meta and Microsoft Corporation (NASDAQ:MSFT), two of the Magnificent Seven stocks that had fallen the most.

Investors are closely watching to see if Ackman continues to be wrong on which Magnificent Seven stocks will outperform or if Meta and Microsoft will eventually take over with gains.

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The EU announced on Friday that Meta must overhaul Facebook’s and Instagram’s addictive design features or face a fine. The tech giant is in breach of the Digital Services Act by focusing on features like infinite scroll, autoplay, push notifications, and highly personalized recommendation algorithms, the European Commission said.

The Commission says these features fuel the user’s urge to keep scrolling and shift the brain into “autopilot mode,” which contributes to unhealthy habits and compulsive use. It found that Meta failed to adequately assess the risks posed by the addictive design of its platforms to users’ physical and mental well-being, including minors and vulnerable adults.

The Commission also accused Meta of ignoring evidence about the amount of time minors spend on Instagram and Facebook at night and how features such as Reels and Stories could encourage excessive or compulsive use of the platforms.

“Evidence also shows that Meta’s current mitigation measures failed to effectively tackle the risks stemming from its addictive design,” the Commission wrote. “For example, Instagram’s and Facebook’s time management tools, including those activated by default for teens, can be easily dismissed and do not lead to a meaningful reduction and control of the usage of the service.”

It’s calling on Meta to disable key addictive features, such as autoplay and infinite scroll by default, and to introduce effective screen-time breaks, as well as modify its recommendation algorithm to make it less focused on user engagement.

The findings are not final, and Meta will now have the opportunity to review the evidence against it and submit a formal response. If the Commission’s findings are confirmed, Meta faces a fine of up to 6% of its total global annual turnover.

Meta did not immediately respond to TechCrunch’s request for comment.

Friday’s announcement marks the second time this year that the EU Commission has found Meta contravening its laws. In April, the Commission found that Meta was failing to prevent children under 13 from using Facebook and Instagram.

Meta has also been facing scrutiny in the U.S. for failing to protect young users on its platforms. Most recently, Meta said in a court filing on Monday that four U.S. states are seeking $1.4 trillion in penalties over claims that the tech giant designed Facebook and Instagram to addict young users and that it misled the public about the platforms’ safety.

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Aisha is a consumer news reporter at TechCrunch. Prior to joining the publication in 2021, she was a telecom reporter at MobileSyrup. Aisha holds an honours bachelor’s degree from University of Toronto and a master’s degree in journalism from Western University.

You can contact or verify outreach from Aisha by emailing [email protected] or via encrypted message at aisha_malik.01 on Signal.

This article was written by Doug Nathman, with research by his team at Trefis.

Shares of Meta Platforms (META +5.91%) rallied Friday morning, gaining as much as 7.3%. As of 11:12 a.m. ET, the stock was still up 6%.

The catalyst that sent the social media and artificial intelligence (AI) specialist higher was a report that lauded the company's strategic pivot.

Image source: The Motley Fool.

A directional shift At one point, Meta's Llama models were highly rated, but that changed with last year's release of Llama 4, which was widely regarded as a relative failure. In response, CEO Mark Zuckerberg changed course, rebuilding Meta's AI organization from scratch. The company's efforts are beginning to bear fruit, according to independent AI and semiconductor research firm SemiAnalysis.

In a report released yesterday, the company issued a report card on Meta's quest for Superintelligence and its pivot over the past year, and gave Zuckerberg and company high marks. "Rebuilding your entire team from the ground up obviously comes with some short-term setbacks, and it appears Meta has finally finished paying down this debt."

The report went on to say that the restructuring of Meta's AI organization took it "to the next level." " We think this is an extremely underappreciated advantage for Meta Superintelligence Leadership (MSL) ... We're overall bullish on the future of MSL, but it's worth emphasizing that they are still basically at step 1."

Meta has effectively reentered the AI race with the release of its Muse Spark AI this week, which many consider competitive with top-tier models from OpenAI and Anthropic.

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Taking a step back, SemiAnalysis believes Meta's current strategy will yield future success:

At the simplest level, there are three things you need to build a true frontier model: data, talent, and compute. We believe Meta is the only hyperscaler/neolab on track to be world-class at all three and therefore has the best chance at catching up with Anthropic/OpenAI.

Zuckerberg is billing Muse Spark as "a strong agentic and coding model at a very low price," according to a post on X.

Investor sentiment has weighed on Meta in recent months, but the company's progress shows that pessimism is misplaced. And at 24 times earnings, the stock is a bargain.

Danny Vena, CPA has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.

Meta shares rallied on Friday, lifting their gains for the week to 15%, on pace for the best weekly performance since early 2024, as optimism builds around CEO Mark Zuckerberg's artificial intelligence strategy.

Three months after introducing Muse Spark, its first proprietary foundation AI model, Meta made two significant announcements this week. On Tuesday, Meta released Muse Image, a new AI model for creating images, and part of an effort to attract creators and advertisers to its new subscription offerings. And on Thursday, the company unveiled Muse Spark 1.1, aimed at running agentic and coding workloads.

This week's revelations show Meta is aggressively trying to make a splash in AI models and compete against OpenAI, Anthropic and Google, which all have big head starts. They also underscore the company's efforts to diversify beyond ads with new revenue streams, and point to progress at Meta Superintelligence Labs, which is being led by Alexandr Wang.

A five-day chart of Meta stock.

With the latest rally, the stock has erased its losses for the year and is now up more than 2%. It's still way behind the Nasdaq, which has gained 13%

Meta also got a boost from reports that the company is progressing with its custom, in-house AI chips, revealed back in March as part of its data center expansion plans. Meta expects to start manufacturing its first chip, code-named Iris, in September as part of its goal to reach 14 gigawatts of computing power next year, according to Reuters.

"Meta may have engineered significant cost savings to get capacity cost per MW well below our and Street expectations," Justin Post, an analyst at Bank of America analyst, wrote following the report.

When Meta reported first-quarter earnings in April, the company raised 2026 guidance for its capital expenditures, or capex, to come between $125 billion and $145 billion and saw its shares sink 7%. At the time, investors appeared concerned about Meta's big AI spending that has yet to create new lines of businesses.

Now that Meta is conveying to investors a more concrete plan about how it will use its ever-growing data center infrastructure, such as potentially competing in the fiercely competitive cloud computing business against giants like Amazon and Microsoft, Wall Street appears more at ease.

It's possible that Meta could further increase its 2026 capex guidance when it reports its second-quarter earnings, BNP Paribas Equity Research senior analyst Nick Jomes said in a research note earlier this week. Jomes said that BNNP estimates Meta to raise that figure to come in between $135 billion to $155 billion.

"While we expect near-to medium term elevated capex, we believe Meta is well positioned to generate ample revenue to support its spending, driven by monetization of its own AI initiatives, advertising share gains, incremental subscription revenue, an optionality of cloud offering, and fees for external use of its AI models," Jomes said in the research note. "Recent subscription offer, the potential cloud offering as well as fees for access to its AI model all serve to provide incremental revenue beyond its core advertising revenue, diversify its revenue stream, and generate additional EBITDA and free cash flow."

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Meta Platforms Inc. NASDAQ:META shares climbed 6% in trading on Friday, becoming the top-performing Magnificent 7 stock.

It extended this week's rally as investors responded to a series of artificial intelligence-related developments, including reports of a new in-house AI chip, expanding computing capacity, and the launch of its latest AI model.

The stock is on track to post its 8th gain in the past 10 trading sessions and its strongest weekly performance since mid-April.

Friday's advance also pushed Meta above its 200-day moving average for the first time in more than two months.

Investor optimism received another boost after Reuters reported that Meta plans to begin manufacturing its custom-designed AI chip, codenamed "Iris," in September as part of its expanding AI infrastructure strategy.

Following the report, BofA Securities reiterated its Buy rating and maintained its $835 price target on the stock.

The brokerage now estimates Meta will spend about $22 billion per gigawatt of computing capacity in 2026, less than half its previous estimate of $45 billion.

BofA said building AI infrastructure for less than $30 billion per gigawatt could provide more attractive economics than Amazon and Google's estimated annual cloud revenue of $10 billion to $16 billion per gigawatt.

The infrastructure expansion is part of Meta's broader effort to scale its AI capabilities as competition among hyperscalers intensifies.

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 debut of the original Muse Spark model in April and marks a more aggressive effort by Meta to compete with OpenAI and Anthropic in AI-powered coding tools.

Citizens said the launch represents a significant step in Meta's AI strategy while reinforcing expectations for continued growth in AI computing demand, despite execution risks.

Meta's chief AI officer Alexandr Wang highlighted the model's capabilities in a series of posts on X.

Calling it an “industry-competitive agentic and coding,” Wang said the model delivers strong tool use, a million-token context window, parallel subagents and advanced computer-use capabilities.

Referring to a review by SemiAnalysis, Wang wrote that “compute daddy” Dylan Patel “has spoken. In his review, Patel said SemiAnalysis believes “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!”

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.

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Meta (NASDAQ: META | META Price Prediction) and CoreWeave (NASDAQ: CRWV) just delivered Q1 2026 results that expose a brewing conflict. Meta is CoreWeave’s largest backlog customer through a $21 billion commitment signed in March 2026, yet Zuckerberg is simultaneously funneling capex into a sovereign compute stack aimed at making rented GPUs optional.

Ad Cash Fuels Meta. Debt Fuels CoreWeave. Meta printed $56.31 billion in revenue, up 33.08% year over year, with advertising alone contributing $55.024 billion. That cash machine is bankrolling a raised $125 to $145 billion full-year capex plan and the launch of Meta Superintelligence Labs. Zuckerberg framed the quarter bluntly: “We’re on track to deliver personal superintelligence to billions of people.”

CoreWeave grew faster in percentage terms, with revenue of $2.078 billion jumping 111.69%, but the plumbing looks stressed. Capex hit $7.695 billion, free cash flow ran to negative $4.711 billion, and interest expense doubled to $536 million. CEO Michael Intrator leaned on scale, citing a $99.4 billion backlog and a path to more than 8 GW by 2030.

Vertical Empire vs. Rented Muscle Meta owns the ads, the data, the models, and increasingly the silicon-to-server stack. CoreWeave sits, in Intrator’s words, “between the models and the silicon”, a neutral GPU landlord named NVIDIA Exemplar Cloud for GB200 inference. That distinction is what “Meta Compute” threatens.

Lens Meta CoreWeave Core Bet Owning the full AI stack Neutral GPU landlord Q1 Free Cash Flow $12.386 billion -$4.711 billion Key Vulnerability $4.03 billion Reality Labs loss Customer concentration, leverage Reddit chatter captures the anxiety on both sides. One widely shared r/wallstreetbets thread mocked Zuckerberg for “panic bought entire AI chip supply”, while another framed Meta’s cloud pivot as selling “excess AI compute”. If Meta actually monetizes surplus capacity, CoreWeave’s neutral-cloud pitch narrows.

Watch the Backlog and the Buildout Meta shares have slipped 5.54% since the April 29 report, and CoreWeave has cratered 30.38% since May 7. You should watch two things: whether Meta starts routing more inference to its own data centers, and whether CoreWeave’s next quarter narrows the gap between $1.15 billion in depreciation and its operating loss of $144 million. Polymarket traders already give Meta a 76.5% probability of finishing the year above OpenAI’s valuation.

Why I Lean Meta, With a Caveat I keep coming back to the cash. Meta funds its AI ambition out of a $32.226 billion operating cash flow quarter. CoreWeave funds its ambition through an $8.5 billion term loan and $50.814 billion in total liabilities. The asymmetry structurally favors Meta, with analysts still holding 57 buy ratings and zero sells. CoreWeave’s 58.63% implied upside to the $142.29 target hinges on Meta continuing to rent rather than build.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.

Contact [email protected] for any questions or corrections.

Meta is making its biggest AI monetization move yet. Bloomberg's Kurt Wagner had an exclusive interview with Mark Zuckerberg.

ToplineThe European Union ordered Meta to enact major design changes to its social media platforms, Instagram and Facebook, and to disable “addictive design” elements like infinite scroll and autoplay videos, or face large fines, in the bloc's latest regulatory action against a U.S. tech platform under its Digital Services Act.

The EU's investigation deemed certain Instagram and Facebook features like infinite scrolling as "addictive design."

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Key FactsThe European Commission, the EU’s executive body, said its investigation found Meta did not adequately assess the risks of its “addictive design on the physical and mental wellbeing of users, including minors and vulnerable adults.”

The Commission highlighted Facebook and Instagram features like autoplay videos, infinite scrolling timelines and “highly personalized recommendations.”

The regulatory body accused Meta of using these features to “fuel the user's urge to keep scrolling” and put their brain on “autopilot,” noting that this behavior was unhealthy.

The Commission also alleged that the social media giant ignored available information about the amount of time minors spend on its apps at night, consuming “reels and stories.”

Deeming Meta’s existing time management tools as ineffective, the EU body noted they can be “easily dismissed” and said the apps’ parental controls are only effective if parents have “adequate technical expertise.”

Forbes has reached out to Meta for comment.

What Does the EU Want Meta To Do?The commission said it wants Meta to implement key design changes, including disabling “autoplay” and “infinite scroll” by default, implementing “effective screen time breaks,” and altering its personalized recommendations algorithm to make it less “engagement-oriented.”

What To Watch ForMeta will have the right to challenge the investigation’s preliminary findings. The company told the New York Times it disagreed with the commission report, which it said didn’t “accurately take into account the significant steps we’ve taken to protect teens.”

What Sort Of Fines Could Meta Face?If the commission’s preliminary findings are confirmed, it could issue a “non-compliance decision” which will allow the EU to slap Meta with a hefty fine of up to 6% of its global annual turnover under the Digital Services Act.

further readingMeta Threatenes With Major EU Fine For Failing To Block Underage Users From Facebook And Instagram (Forbes)

The bloc's regulator said the tech giant may be in breach of its digital rules, opening the door to heavy fines.

The EU charged Meta Platforms' Instagram and Facebook on Friday with breaching its ​tech rules, with regulators targeting features they say are designed to keep users hooked and demanding changes to autoplay ‌and infinite scroll or risk fines.

This week, Meta launched Muse Image, Meta Superintelligence Lab’s first image generation model. And with the new AI tool, Meta is once again testing the limits of privacy rights.

As Meta explains it, Muse Image “uses advanced reasoning to understand complex prompts, seamlessly blending multiple photos into high-quality creations you can download and share anywhere—including directly to your chat, story, or feed.” Examples provided by Meta include creating animated versions of images, putting famous landmarks in the background, and changing everything from a person’s accessories to food.

Oh, yeah—and it can use photos from other accounts without permission. 

Meta touts features like generating images directly in WhatsApp chats, and 30 AI-powered effects available in Instagram stories, with more coming to Messenger and Facebook soon. But, it further highlights that Instagram users can easily take other people’s content for their AI creations.

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“You can also @-mention Instagram accounts in the Meta AI app to bring specific Instagram profiles right into your images,” Meta’s post reads. “Whether you want to design a custom event invitation, mock up a collaborative creative concept, or generate a personalized graphic, tagging a username lets Meta AI use public photos to build a visual that’s ready to post.”

Unsurprisingly, Meta is positioning this as a positive thing, stating that Muse Image is “rooted in your world.” It gives a theoretically wholesome example of using a friend’s profile to create an AI-generated birthday card.

Yet it doesn’t take much imagination to guess the ways such easy access could be abused. Social media users were, not so shockingly, unhappy about this development. One Reddit user wrote, “The tool itself is not the surprising part. The surprising part is still pretending ‘you can turn it off in settings’ is meaningful consent for normal users.”

Explore TopicsAImetanewsprivacy

Shares of Meta rallied on Thursday following the launch of a new AI model and reports of a big custom-chip milestone.