Meta CEO Mark Zuckerberg attends the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, U.S., July 9, 2026.

Brendan McDermid | Reuters

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 the Muse Spark, its first proprietary 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 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.

—CNBC's Jonathan Vanian contributed to this report.

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