META Stock Jumps 7% as BofA Slashes AI Infrastructure Cost Forecast

Meta Platforms (META) shares jumped 7% in early trading on Friday, breaching the 200-day moving average for the first time in over two months. The rally was driven by optimism around the company's AI initiatives and bullish Wall Street commentary. META stocks are on track to post a 10th gain in 12 sessions and clock their best week since mid-April.

BofA Cuts Meta AI Infrastructure Cost Estimate to $22 Billion Per Gigawatt

BofA Securities reiterated its Buy rating and $835 price target on Meta after a Reuters report stated that the company is accelerating its AI infrastructure buildout with a custom-designed chip. Meta is reportedly planning to begin manufacturing its in-house AI chip, codenamed 'Iris,' in September. The chip is part of Meta's plan to expand total computing capacity to 14 gigawatts by 2027.

According to an Investing.com report, BofA now estimates that Meta will spend about $22 billion per gigawatt in 2026, less than half of its previous estimate of $45 billion. The firm said building capacity for under $30 billion per gigawatt could offer more attractive economics than Amazon's and Google's estimated $10 billion to $16 billion in annual cloud revenue per gigawatt.

Meta Launches Muse Spark 1.1 AI Model

Following Meta's launch of Muse Spark 1.1, an AI model with enhanced coding and tool-use capabilities, Citizens said it represents a significant step in the company's push to compete with leading AI labs while reinforcing expectations for growing AI computing demand despite execution risks.

Retail Sentiment Turns Extremely Bullish Ahead of Q2 Earnings

Stocktwits users grew increasingly optimistic about a sustained rally into second-quarter earnings. One Stocktwits user expects Meta shares to reach $700 before its Q2 earnings and surpass $800 after the results. Retail sentiment on Stocktwits turned 'extremely bullish' from 'bullish' over the past 24 hours, amid a 221% jump in message volume. META was also among the top trending tickers on the platform.

META shares have gained around 2.6% so far this year, outperforming the Roundhill Magnificent Seven ETF's (MAGS) 1.5% increase.

FAQ

What caused META stocks to jump 7% on Friday? Meta Platforms shares jumped 7% in early trading on Friday due to optimism around the company's AI initiatives and bullish commentary from Wall Street analysts, including BofA Securities reiterating its Buy rating with an $835 price target.

How much will Meta spend per gigawatt on AI infrastructure in 2026? BofA Securities estimates that Meta will spend about $22 billion per gigawatt in 2026, which is less than half of its previous forecast of $45 billion per gigawatt.

When will Meta begin manufacturing its in-house AI chip? Meta is reportedly planning to begin manufacturing its in-house AI chip, codenamed 'Iris,' in September.