Meta’s stock rebounds as agentic AI coding and custom chips ease spending fears

Meta's stock bounced Thursday on two catalysts: the release of a new agentic AI coding model and progress on its in-house custom AI chip, which is designed to reduce the company's dependence on Nvidia GPUs and lower long-term capex intensity. The custom chip milestone is particularly significant because it signals Meta may be approaching a point where infrastructure cost growth could decelerate relative to revenue — a key concern that has pressured the stock during the current capex supercycle.

Meta's underlying financials remain strong: the company posted $201B in revenue for FY2025, up 22.2% year-over-year, with a 30.1% net margin and $23.49 in diluted EPS. That revenue trajectory and margin profile give the company substantial room to absorb heavy AI investment without immediate earnings deterioration.

The bull case hinges on whether agentic AI tools and the custom chip program translate into a credible narrative that capex growth is peaking or becoming more efficient. If the chip achieves meaningful internal deployment, it could structurally reduce per-unit inference costs and improve margin leverage over the next several quarters.

The bear case is that this is still a sentiment-driven rebound on early-stage milestones — the chip is not yet at scale, and the agentic coding model has not been shown to drive direct revenue. Meta's capex guidance remains elevated, and until there is hard evidence of spending deceleration or AI monetization, the relief rally could fade.

The key things to watch: any incremental updates on custom chip deployment timelines, advertising revenue growth in the next quarterly print, and whether management provides more specific capex guidance revisions on the next earnings call.