Meta shares jump 5% as analysts welcome new Muse AI agent

Meta Platforms (NASDAQ:META) shares climbed around 5% in premarket trading on Wednesday as analysts responded positively to the launch of Muse, the company’s standalone personal AI agent.

The product is being viewed as an important test of whether Meta can translate its substantial spending on artificial intelligence infrastructure into consumer products and, eventually, additional revenue opportunities.

Mizuho Securities analyst Lloyd Walmsley described Muse as “a significant step in that direction,” pointing to the application’s functionality, level of refinement and free availability as potential advantages in attracting users.

KeyBanc also maintained a positive view of Meta, keeping its $780 price target and arguing that investors continue to “under-estimate Meta’s AI positioning and product cycle.”

Analysts see distribution advantage for Meta

Analysts highlighted Meta’s existing consumer reach as one of the company’s main advantages as competition intensifies around AI agents.

Morgan Stanley estimates the potential market for consumer agentic tasks across areas including e-commerce, travel, digital advertising and everyday logistics at about $30 trillion.

Analyst Brian Nowak said success in this market is likely to depend heavily on distribution and access to consumer data, areas where Meta has significant scale through Facebook, Instagram, WhatsApp and Messenger.

Muse is also being offered without an upfront charge and incorporates privacy features including the dedicated Muse Secure VM. Analysts believe these factors could help Meta compete with standalone AI services when attracting consumers to the platform.

Investors expected to focus on Muse adoption

Despite the positive initial reaction, analysts cautioned that the launch alone may not be sufficient to drive a sustained revaluation of Meta shares.

Investors are likely to seek evidence of strong adoption and engagement before assigning substantial long-term earnings value to Muse, particularly after previous Meta initiatives such as Facebook Shopping and the Metaverse fell short of some early expectations.

“As with other Meta apps, we view engagement as the initial barometer of success, with monetization following over time,” KeyBanc analyst Justin Patterson said.

Nowak similarly identified Muse as a potentially significant source of long-term earnings upside that is not yet reflected in Meta’s valuation, while noting that evidence of adoption and monetisable user behaviour will be important.

Muse could increase competitive pressure on Google

The launch may also have implications for Alphabet as Meta seeks to capture more consumer activity involving shopping, travel, scheduling and other everyday tasks.

If users increasingly rely on AI agents such as Muse to make decisions or complete transactions, some activity traditionally beginning with internet search could shift towards agent-based platforms.

Morgan Stanley said a successful Muse rollout “could pose a new potential threat to the position of search.”

That could increase pressure on Alphabet to maintain the pace of development around Gemini as major technology companies compete to become the primary interface for AI-assisted consumer activity.

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