Muse tops Apple Inc.'s App Store free app chart; Wall Street is bullish on Meta's (META.US) AI monetization prospects.

Meta Platforms (META.US)'s newly launched AI agent Muse is receiving increasingly positive reviews from Wall Street analysts. After it topped Apple Inc.'s U.S. App Store free app download chart, JPMorgan believes Muse could help Meta prove that its massive artificial intelligence investments can not only enhance its core advertising business but may also open up new sources of returns beyond advertising. JPMorgan noted that Muse currently ranks first on the U.S. App Store free app download chart, and its rapid viral spread, combined with Meta's strong user distribution capabilities, has made the market buzz around the product "quite evident." Although Muse is still in the early stages of user adoption, the bank believes it has the potential to become one of the most widely used consumer AI applications after ChatGPT. As user scale and engagement continue to grow, Muse may begin to validate the returns on Meta's AI investments beyond its advertising platform. JPMorgan believes Muse's potential total addressable market could reach tens of trillions of dollars, and reiterated its "Overweight" rating on Meta with a price target of $820. Bank of America Corp analyst Justin Post also believes that Muse's initial market reception sends a positive signal for Meta's overall AI strategy. After its official launch on September 8, Muse quickly rose to the top of the App Store's productivity category and currently maintains a high rating of 4.9 stars across more than 25,000 user reviews. Bank of America Corp pointed out that a major concern among investors previously was whether Meta could build a differentiated, competitive AI product. Muse's initial success could boost market confidence that Meta's massive AI investments will ultimately deliver commercial returns. The bank maintained its "Buy" rating on Meta with a price target of $810. Evercore ISI head of internet research Mark Mahaney believes Muse may begin to answer a core question that has long troubled Meta investors: whether the company, after investing heavily in AI infrastructure, can create new revenue sources beyond its existing businesses. Mahaney said one of Meta's biggest advantages is its approximately 3.6 billion users. If just 1% of existing users were willing to subscribe to Muse at $20 per month, the corresponding annual revenue could reach about $8 billion. Beyond the subscription model, Muse has multiple potential commercialization paths in the future, including advertising, paid subscriptions, and transaction revenue sharing. However, Mahaney believes that in the near term, Meta is more likely to prioritize expanding Muse's user scale and usage frequency rather than rushing to commercialize it. If Muse ultimately develops into a new business of substantial scale, Meta's valuation multiple could also have room for further expansion. Mahaney also compared Meta's current situation to the AI-driven valuation re-rating that Alphabet Inc. Class C (GOOG.US, GOOGL.US) previously experienced. He noted that as market concerns that Alphabet Inc. Class C might fall behind in the AI race gradually faded, Alphabet Inc. Class C's price-to-earnings ratio rose from about 15x to 30x over roughly 12 months. In his view, the market environment Muse is currently creating for Meta is similar. If Muse can prove that Meta not only possesses strong AI infrastructure and model capabilities but can also build AI products widely adopted by consumers, the market's view of the company's AI capital expenditures could improve further. Mahaney said this is also one of the important reasons why Evercore views Meta as its top pick. Muse's popularity has further strengthened market attention on competition in consumer AI agents. For Meta, its core advantages come not only from AI technology itself but also from its massive existing user base and the distribution capabilities formed by platforms including Facebook, Instagram, and WhatsApp. Once Muse can leverage this ecosystem to continue expanding its user scale, Meta may gain a new commercialization entry point beyond its advertising business. However, Muse is still in its early launch phase, and whether user growth can be sustained and how large business models such as advertising, subscriptions, and transaction revenue sharing can ultimately become still remain to be seen. In terms of market performance, Meta's stock price has risen nearly 14% year-to-date, while the Roundhill Magnificent Seven ETF (MAGS.US), which holds Meta and other "Magnificent Seven" tech giants, has risen more than 11% over the same period. Stocktwits data shows that amid high discussion activity, retail investor sentiment toward Meta stock has currently turned "neutral."