Meta Platforms Inc (NASDAQ:META) shares are trading higher Monday. Positive analyst coverage regarding Meta’s new Muse AI assistant appears to be driving the stock. Here’s what you should know.
- Meta Platforms shares are advancing steadily. Why is META stock advancing?
Wedbush Sizes Up Meta’s Muse Opportunity, Raises Price Target
Wedbush analyst Ygal Arounian raised the price target on Meta to $650 from $595 while keeping a Neutral rating, crediting momentum on Meta’s AI products even as the analyst stays cautious on near-term revenue.
Arounian called Muse a compelling product, but said Meta is treating it as a longer-term monetization play, since a brand-new product category like this will take time to build consumer understanding and meaningful paid adoption.
Wedbush pegs Muse subscription revenue at roughly $5 billion by 2027, about 1.5% of its overall Meta revenue forecast, with a separate Business AI offering potentially adding another $1 billion. The firm isn’t yet modeling much advertising or transaction revenue from Muse, though it sees both as future opportunities.
Among free apps on U.S. app store, Muse had climbed to the second-highest download spot as of last Thursday, sitting just behind ChatGPT’s first-week performance. Wedbush’s $650 target blends a discounted cash flow model with a 19.5-times 2027 earnings multiple and a 9-times EV/EBITDA multiple.
Goldman Sachs Reiterates Buy, Cites Muse and Distribution Edge
Separately, Goldman Sachs analyst Eric Sheridan kept the Buy rating and $725 price target. Sheridan pointed to a broader shift from AI tools that simply answer questions toward agents capable of independently completing tasks, noting Muse can navigate the internet, handle multi-step processes, fill in online forms and place orders without a person directing each step. He said Meta’s reach across Facebook, Instagram, Messenger and WhatsApp gives it a distribution advantage that’s difficult for newer AI companies to match.
Sheridan flagged consumer wariness around data privacy as the biggest risk to wider adoption, and said reliable performance will be key to keeping users engaged. He said his conviction has strengthened given Meta’s recent litigation settlement, the Muse launch, an upcoming Connect event later this month and the potential for additional AI model releases ahead.
AI’s Biggest Names Call for Slower Growth
In a Saturday essay, Anthropic CEO Dario Amodei called for the industry to ease its pace of capability gains, warning that unchecked AI agents could eventually cause massive damage if left unchecked, a proposal that drew public support from OpenAI’s Sam Altman, DeepMind’s Demis Hassabis and Tesla’s Elon Musk.
With some of AI’s most influential and wealthiest figures voicing caution about their own industry’s trajectory, investors appear to be taking notice, and the steady cash flow communications services companies like Meta generate from advertising and subscriptions may also be drawing added investor interest amid elevated bond yields and inflation concerns.
META Shares Are Rising
META Price Action: Meta shares were up 2.72% at $665.60 at the time of publication on Monday, according to Benzinga Pro.
Image: Shutterstock
Login to comment