Meta (META) Stock Outlook: Meta Compute Launches, Iris Chip in September; $743 Target After 15% Week

Meta Compute is Meta’s second business segment beyond ads. It will enable businesses to use Meta infrastructure to access AI compute power and foundation models, which positions Meta as a competitor to AWS, Microsoft Azure, and Google Cloud. Meta wants to turn its massive AI infrastructure into another source of growth. 

According to research firm Wolfe, Meta could see about a 20% increase in earnings per share for every gigawatt of AI capacity that it successfully monetizes. In 2026, Meta will have about 7 gigawatts of AI compute capacity; in 2027, it’s expected to grow to 14 gigawatts, showing just how big this potential growth driver could be.

Another growth catalyst is Iris, a Meta-developed AI chip produced by TSMC for its partnership with chipmaker Broadcom. It’s expected to start production in September 2026. It will lower Meta’s dependence on NVIDIA or AMD chips, potentially lowering costs for AI infrastructure in the long run, and can run both AI training and inference workloads on its expanding AI ecosystem. 

The stock’s recent gain of about 15% shows that investors are confident Meta Compute and Iris can spur further growth even though Meta is spending a lot of capital to fuel the AI race, ahead of its July 29 earnings report.

Despite these and other regulatory setbacks, the market remained focused on Meta’s AI plans. Last week Meta temporarily yanked its Muse Image product following public concern that the AI-generated images could compromise privacy, EU regulators levied additional fines to the company, and France proposed requiring publishers to accept new payments from Meta. Even so, shares climbed a 15% in the week.

A key reason for the rally was the debut of Meta Compute, accompanied by a slew of bullish analyst coverage around Meta and its growing role as a top player in the AI infrastructure market. Ahead of the July 29 earnings report, market participants are watching for more information on Meta Compute’s timeline for launching commercially, the production of the Iris AI chip and Meta Capital expenditure for 2026.

These could have a more meaningful impact on Meta’s valuation in the medium term than the regulatory issues that emerged last week.

META Technical Analysis: A breakout gap forms at $669 after breaking above a symmetrical triangle on the daily chart; watch for a breakout confirmation at $691.40 this week.

On the daily chart, META has popped over a symmetrical triangle with strong volume backing the move. The RSI near 66 is still healthy, meaning there's room for the trend to run without getting overbought.

Meta (META) Stock Outlook - Source: Tradingview

If the market holds and closes above $691.40, that should seal the breakout and potentially put the stock on track to hit a measured move target of $743.40. A close below $628.30 would negate the thesis. Next support levels would likely be around $628 and $582.

Trigger:  Confirmed close above $691.40 for the week ahead

Target:  $743.40 — triangle measured move

Stop Loss:  Close below $628.30 — breakout fails

Meta Compute: a new business unit that sells AI compute and models, offering competition to AWS, Azure, and Google Cloud.

Iris chip: Production begins in September 2026. 14 GW of compute is the plan for 2027. Broadcom and TSMC are the partners.

Q2 Earnings are July 29. They guided revenue of $58-61 billion, with a consensus estimate at $59.8-60.2 billion. An update on CapEx guidance will be critical.

Meta Compute is a new cloud infrastructure business unit from Meta. It was announced for the week of July 7-11 and will sell AI compute and model access to third parties, competing head-to-head with AWS, Microsoft Azure, and Google Cloud. It monetizes Meta's excess AI infrastructure, which is the excess capacity of its data centers and GPUs used to train and infer models, which are rarely at 100% utilization. Wolfe estimates Meta Compute will add 20% to its EPS per gigawatt of capacity monetized at $25 billion. This revenue stream would not be in today's Wall Street models, which only capture ads.

Iris is the new Meta proprietary AI chip made with Broadcom and TSMC to handle training and inference for AI models today purchased from Nvidia and AMD. Zuckerberg confirmed that production will start in September 2026. 14 GW of compute are planned for 2027, compared to ~7 GW this year. The chip will help Meta reduce reliance on expensive GPU pricing from suppliers. It will help provide lower per-unit infrastructure costs to the Meta Compute business and give Meta proprietary AI models to sell.

Meta gained 15% for the week following a 6% of revenue EU fine for its addictive design and the France requirement to pay publishing fees. The Muse image creation tool was also pulled from the App Store days after launch, amid privacy concerns. The market was crystal clear that the market price for Meta Compute optionality on EPS, where Wolfe's estimate is 20% per gigawatt monetized, is higher in real terms than the EU fine exposure. The confirmation of September Iris production is also a major reduction in infrastructure build cost per unit. It's worth noting SemiAnalysis's high marks report card for Meta's AI strategy was the catalyst for the 6.16% gain on Friday.

META at $669 capped the strongest week for months (up 15%). That came after Meta Compute was launched and is competing as a cloud business with AWS/Azure. Production for the Iris chip will start in September, aiming for 14 GW of compute in 2027. Meta received a high mark for AI strategy from SemiAnalysis. The EU fine and Muse image removal barely moved the needle. 

The symmetrical triangle is breaking out with volume. For the week: a close above $691.40 will be the target for $743.40; stop out at $628.30. Earnings are July 29; that's the fundamental catalyst. The Meta Compute timeline, Iris chip production, and the CapEx update are the items that will make or break the $743 price target to end the year.