Topline
Mark Zuckerberg’s net worth increased by $12 billion on Friday as Meta’s stock concluded its best weekly performance in more than two years, following the debut of a new AI model and reported plans for the Facebook parent to develop in-house AI chips.
The Facebook parent’s stock saw a positive investor reaction to its new AI model and reported plans for in-house AI chips.
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Key Facts
Meta jumped 6% on Friday to just under $670, extending a more than 14% rally for the stock over the week, its best five-session performance since a 20.5% surge the week ending Feb. 2, 2024, according to FactSet data.
The latest boost in Meta shares added $12.7 billion to Zuckerberg’s net worth, valued at $229.3 billion, as he ranks No. 6 in the world behind No. 5 Michael Dell ($241.3 billion) and No. 4 Jeff Bezos ($255.2 billion), according to Forbes estimates (for the rest, see our Real-Time Billionaire List).
This week Meta rolled out Muse Image, a new AI model to be used as a tool for creating images, and the latest update to its foundational AI model Muse Spark, which Meta claimed is a “significant upgrade” that makes the model better at coding, using software tools and understanding texts and images together.
On Thursday, Meta’s shares rallied by 4.7% after Reuters reported the company planned to start producing an in-house AI chip by September.
Bank of America Analyst Justin Post applauded Meta’s chip plans, writing in a note that the company may have found a way to build or operate its AI infrastructure much more cheaply than Wall Street expected.
contra
Meta has faced backlash for its Muse Image tool from Hollywood unions, talent agencies and cybersecurity firms over privacy concerns. Instagram’s implementation of the tool allowed users to create AI content based on images posted by public accounts, which are not notified when their posts are used for image generation, and users are automatically opted into the program. SAG-AFTRA, a major Hollywood union representing more than 160,000 actors and entertainment industry professionals, urged its members to opt out of the tool late Thursday, while talent agency Creative Arts Agency called for Meta to make the feature opt-in, not opt-out. Cybersecurity firm Malwarebytes warned the tool could be used for “impersonation, scams, or other abuse.” Meta, in response to criticism, said in a statement that users under 18 were automatically opted out and that it will “take action” against content that violates its community standards.
what to watch for
Meta is expected to report quarterly earnings by the end of the month. The company is expected to report a nearly 7% boost in revenue quarter-to-quarter, but a 31% downturn in earnings per share, according to FactSet. Meta’s $10.44 earnings per share through its first quarter were boosted by a one-time $8 billion tax benefit.
key background
Investors poured into Meta’s stock to open the year as shares briefly peaked in late January before stumbling to a low in March. That monthlong decline came as Meta was struck by a pair of landmark court rulings, one of which found Meta and Google liable for harming a woman’s mental health because of addictive design features on their platforms, and the brief closure of its metaverse. At the time, Meta also reportedly delayed the release of its AI model after it failed to outperform AI models from rivals OpenAI, Google and Anthropic in benchmark tests. The stock has since rebounded by more than 28% as Meta has ramped up production of its AI products, including Muse Spark and Muse Image.
