Meta Shares Rise for Second Straight Day Amid New AI Model Launch

This is a roundup of Tuesday afternoon market developments. Meta Platforms shares rose nearly 3% on Tuesday, gaining for a second straight day. Meta has gained roughly 6% over the two sessions, fueled by enthusiasm for the latest AI model family, Muse Wonder. Meta released Muse Wonder and the more advanced Muse Wonder Full on Monday afternoon.

CEO Mark Zuckerberg called the model family a "big step forward" in Meta's AI efforts on the Cheeky Pint podcast published Monday. Zuckerberg said Meta is now at the technological frontier and will push that frontier with future work. Wells Fargo said Meta has reached the "AI frontier" with Muse Wonder Full. Wells Fargo said Muse Wonder Full ranks behind only Anthropic's Claude Opus 5.5 on the Artificial Analysis Intelligence Index.

Muse Wonder is initially available to developers through Meta's Model API and the Muse Code software-writing agent. Muse Wonder Full is available to paying Muse Code subscribers. Meta said Muse Wonder will soon become available through the Muse personal agent app, starting with paid subscribers. The releases could attract more paying users and strengthen Meta's consumer-facing AI offerings, creating revenue opportunities beyond advertising. Meta received bullish analyst notes and price-target increases following the launch. Baird called the launch another example of tangible product progress from Meta's heavy AI investments. KeyBanc said the launch reinforces that Meta has the talent, data, distribution and computing capacity to compete in AI.

Muse Wonder is an incremental development rather than a major catalyst by itself. Meta's steady pace of AI releases following Muse Spark in April is encouraging. Zuckerberg said the time between increasingly larger classes of models should shorten. The potential scale of subscription revenue remains unclear. The progress provides growing evidence of competitive products with monetization potential, easing earlier concerns about AI spending without a clear payoff.

Stocks were lower across the board Tuesday afternoon as major participants in the AI infrastructure trade continued to struggle. Micron, SK Hynix and other memory stocks fell sharply for a second straight day after China's CXMT touted more efficient memory-chip production this weekend. The AI trade had already been weakening before those developments. The iShares Semiconductor ETF and VanEck Semiconductor ETF were each on course for a sixth consecutive losing session. Both ETFs were experiencing the longest losing streaks since May 2025, when both fell for seven consecutive sessions. Salesforce shares rose 2%. Microsoft shares rose 1%. Apple held modest gains and was attempting a record close after unveiling the company's biggest push yet into connected-home devices. Johnson & Johnson fell about 6% and was the biggest laggard in the Investing Club portfolio.

JPMorgan, Citigroup, Wells Fargo and Goldman Sachs opened the unofficial third-quarter earnings season Tuesday morning with mostly healthy results. Credit metrics pointed to a resilient economy. Investment banking activity remained robust, although activity was less strong than in the second quarter. JPMorgan shares were slightly lower. Citigroup shares fell 4%. Wells Fargo shares dropped 2%. Goldman Sachs shares rose about 0.5%. RBC Capital Markets bank analyst Gerard Cassidy attributed the stock moves partly to weaker estimate revisions than in the second quarter and expectations of fewer share buybacks.

Wednesday morning brings earnings from ASML, Bank of America, BlackRock, Morgan Stanley and State Street. Bank of New York reports Thursday morning. September consumer price index data are due Wednesday at 8:30 a.m. ET and are expected to influence expectations for future Federal Reserve interest-rate decisions. The Fed's Beige Book, a periodic account of current economic conditions gathered by the 12 regional Federal Reserve banks, is due at 2 p.m. ET.