Why is Meta top performer among Magnificent 7 stocks today

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.

AI infrastructure plans lift investor sentiment

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.

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 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!”

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.