Meta’s Muse Could Become Most Widely Used Consumer AI App Since ChatGPT, JPMorgan Says — BofA Sees Improving AI Return Sentiment

Muse’s early momentum is giving analysts more confidence that Meta can turn its AI spending into new revenue streams, with subscriptions, advertising and transaction fees all emerging as potential paths.

• Muse is the No. 1 free app in Apple’s U.S. App Store and holds a 4.9-star rating across more than 25,000 reviews, per the BofA note on TheFly.
• JPMorgan reiterated an ‘Overweight’ rating and $820 target, while BofA maintained a ‘Buy’ rating and $810 target.
• Just 1% of Meta’s 3.6 billion users paying $20 a month could generate about $8 billion in revenue for Meta, according to Evercore’s Mark Mahaney.

Meta Platforms Inc.’s (META) new Muse AI agent is drawing increasingly positive commentary from analysts after climbing to the top of Apple’s U.S. App Store, with JPMorgan saying the product could help Meta demonstrate artificial-intelligence returns outside its core advertising business.

Muse is currently the No. 1 most-downloaded free app in the U.S. App Store, JPMorgan said, adding that the combination of the product’s virality and Meta’s powerful distribution platform has made the buzz around it “quite palpable.”

While adoption is still in its early stages, the firm said Muse has the potential to become the most widely used consumer AI application since ChatGPT, per TheFly.

JPMorgan expects adoption and engagement to continue ramping and believes Muse could begin proving out AI returns beyond Meta’s advertising platform. The analyst sees a potential total addressable market in the tens of trillions of dollars and reiterated its 'Overweight' rating and $820 price target on META stock.

BofA Says Muse Is Improving The AI Investment Narrative

BofA analyst Justin Post also pointed to the app’s early reception as an encouraging signal for Meta’s broader AI strategy.

Muse, which launched on Sept. 8, quickly reached No. 1 in the Productivity category on the App Store and has maintained a 4.9-star rating across more than 25,000 reviews, per TheFly.

BofA believes investors have been concerned about whether Meta can build a differentiated AI product, and sees Muse’s early success driving greater optimism about potential returns on the company’s substantial AI investments. The firm maintained its 'Buy’ rating on Meta with a target price of $810.

Evercore Sees Multiple Revenue Paths For Muse

According to Mark Mahaney, Evercore ISI senior managing director and head of Internet research, Muse could begin answering a question investors have had around Meta’s heavy AI spending: whether that investment can generate returns outside the company’s existing businesses.

“It helps if you start off with 3.6 billion users like Meta does,” he told CNBC in an interview,  adding that if just 1% of that base signed up at $20 a month, Meta would be looking at roughly $8 billion in revenue.

In the conversation, Mahaney pointed to Google’s rerating last year, when the stock went from roughly 15 times earnings to 30 times earnings within 12 months, after concerns that AI had left the company behind began to fade. 

“I think the setup is so similar here for Muse, and it’s one of the reasons for Meta, and it’s one of the reasons that Meta’s our number one pick,” he said.

Retail Sentiment Around META Stock

On Stocktwits, retail sentiment around META stock turned ‘neutral’ amid high message volume.

So far this year, the stock has rallied nearly 14%. In comparison, the Roundhill Magnificent Seven ETF (MAGS), which holds META stock, has risen over 11% over the same period.

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