Wall Street expects Meta’s new AI agent to become a new revenue engine

WALL Street has turned bullish on Meta Platforms, betting that its new artificial intelligence agent Muse AI could open a new revenue stream for the social media giant and reshape the company’s AI monetisation prospects.

Muse, launched on Sep 8, is an AI assistant that can send e-mails, book travel and complete transactions such as selling a car on behalf of a user. The basic version is free, with subscriptions priced at US$20 and US$100 a month for heavier use.

Since its launch, shares of Meta Platforms have surged more than 20 per cent, outpacing the “Magnificent Seven” group of US tech companies during the period. Shares have added over US$200 billion in market capitalisation to touch their highest level in more than seven months as at the last close.

“While it is still early, we believe that Muse has the potential to become the most widely used consumer AI application since ChatGPT,” JPMorgan Chase analysts said in a note, crediting the app’s early traction to strong product-market fit, Meta’s distribution reach and a free tier that lowers the barrier to trial and repeat use.

The Muse AI app, available on iOS and Android but only in the US and Canada regions, has clocked 2.8 million downloads in its first 12 days since launch, data from Apptopia shows.

If compared on similar metrics with the first 12 days of OpenAI’s ChatGPT, Muse has 1.8 million downloads versus 1.3 million for ChatGPT.

Early reviews suggest “functionality is resonating with users, particularly agent’s ability to execute multi-step tasks and workflows with limited user intervention”, Bank of America Global Research analysts said.

Enthusiasm around Muse AI sparked a Wall Street tech rally on Monday (Sep 21), lifting Meta shares more than 11 per cent and boosting chipmakers, including AMD and Intel, with AMD crossing the US$1 trillion valuation mark for the first time.

“The market has interpreted Muse as a boon for the already significantly bottlenecked CPU (central processing unit) market,” said Michael O’Rourke, chief market strategist at JonesTrading.

SEE ALSO

Amazon blocks Meta’s Muse AI agent from its retail site

SK Hynix, Samsung gain as Asian stocks climb after tech powers Wall Street

Meta’s new Muse AI app tops charts, draws strong reviews

Meta’s Zuckerberg weighs in on AI safety; favours evaluators over slowdown

Meta launches AI agent that can access other apps to send emails, make payments

More

Brokerage Jefferies estimated that if Muse AI could see one billion users by end of 2027 and at least 3 per cent transition to a paid version, then it could result in US$10.8 billion in annualised revenue, as the brokerage raised its price target on Meta’s stock to US$875.

UBS Global Wealth Management analysts said in a note that Muse AI provides “early evidence that consumer AI agents could achieve broad adoption, offering new AI monetisation opportunities beyond enterprise application”.

Of the 64 brokerages that cover Meta’s stock, 57 rate it “buy” or higher with a median price target of US$760, data compiled by LSEG shows. REUTERS