Muse user growth momentum is strong, but long-term monetization prospects remain uncertain; BNP Paribas maintains an "Outperform" rating on Meta (META.US).

Meta Platforms (META.US) artificial intelligence (AI) agent Muse has continued to attract user attention since its launch last month. BNP Paribas, citing third-party data, noted that Muse's cumulative downloads have exceeded 5.6 million, and it has topped the Apple Inc. App Store rankings, with its initial U.S. market launch performance even surpassing OpenAI's ChatGPT and Sora. However, despite Muse's strong user appeal, BNP Paribas believes that whether the product can convert initial popularity into long-term user activity, and how it can achieve sustained monetization, remain issues investors need to watch. BNP Paribas analyst Nick Jones maintained an "Outperform" rating on Meta in his latest report, with a target price of $885. He noted that Meta's massive social platform user base provides a clear advantage for Muse's promotion, but the product is still in the early stage of cultivating user habits. Strong initial download performance, Meta's social ecosystem boosts user growth According to third-party data cited by BNP Paribas, Muse has accumulated more than 5.6 million downloads since its September launch and once topped the Apple Inc. App Store rankings. Jones said that compared with other AI platforms, Muse's initial U.S. market downloads exceeded those of ChatGPT and Sora. He believes this performance is not surprising, because Meta's Instagram, WhatsApp and Facebook have huge existing user groups that can provide Muse with natural promotion channels and user traffic. Compared with standalone AI apps that need to build a user base from scratch, Meta can leverage the reach of its existing social products to increase market exposure for new products and reduce user acquisition costs. It is worth noting that OpenAI's video generation app Sora once went viral quickly last year, but has since been integrated into ChatGPT and no longer operates as a standalone app. However, rapid download growth does not mean Muse has already established stable user habits. Jones pointed out that Muse's app open rate has now stabilized, but remains lower than mature apps such as Google, ChatGPT, Instagram, WhatsApp and Facebook. In his view, this indicates that although Muse has successfully attracted many users to try it, it is still some distance from becoming a tool consumers use frequently in daily life. For Meta, the key in the next stage will no longer be just driving download growth, but improving user retention, usage frequency and long-term engagement. Difficult to disrupt vertical platforms in the short term, user experience still needs improvement As AI agents gradually gain capabilities such as information search, product comparison and transaction execution, the market has begun to focus on whether such products will pose a competitive threat to e-commerce, travel and other vertical service platforms. However, BNP Paribas believes that at this stage, Muse's impact on these platforms should not be overestimated. Jones said that although Muse received a good initial market response, given its still limited user penetration and its lack of the direct goods or service supply, complete transaction experience and customer service capabilities that vertical platforms possess, the product is unlikely to pose a substantial threat in the short term. For example, specialized e-commerce or travel platforms usually not only provide information retrieval and recommendation services, but also have complete systems for inventory, transaction processing, order management and after-sales support. By contrast, even if AI agents can help users discover products or services, they may not be able to independently complete the entire transaction process. Therefore, whether Muse can further change consumers' shopping and service usage habits in the future still depends on whether Meta can continuously improve relevant functions and expand cooperation with external merchants. Long-term monetization model remains uncertain, advertising business may become an important breakthrough In addition to user growth CKH HOLDINGS product functions, Muse's commercialization path is also a key focus for BNP Paribas. For a long time, advertising has been Meta's most important source of revenue. However, for a consumer-facing AI agent like Muse, there is still no clear answer on how the company will establish a mature revenue model in the future. According to Jones's analysis, Muse currently appears to achieve partial monetization mainly by charging partners a small transaction fee. At the same time, Muse adopts a model combining free basic services with paid subscriptions: the basic version is free and open, while users with higher usage needs can choose to pay monthly to obtain higher usage quotas. Jones believes that this pricing strategy helps Meta expand user scale and increase user engagement in the early stage of product development, rather than pursuing revenue maximization too early. However, he emphasized that Muse's long-term monetization capability remains an important issue for investors. Considering Meta's accumulated experience and resources in digital advertising, BNP Paribas believes that as Muse's user engagement continues to increase, advertising may become an attractive commercialization direction in the future. This means that Muse's future revenue sources may not be limited to subscription fees and transaction commissions, but may also gradually expand into advertising. However, with user habits not yet fully established, whether the relevant business model can generate substantial revenue remains to be verified. OpenAI launches Dots, competition in consumer AI agents may further intensify In addition to Muse's own development, BNP Paribas also focused on the competitive changes emerging in the consumer AI agent market. Among them, OpenAI's new product Dots launched this week drew analysts' attention. Jones believes that the degree of user recognition Dots can gain in the future will be an important indicator for observing the competitive landscape of this market. At the same time, the market is also watching whether SpaceX (SPCX.US), Alphabet Inc. Class C parent Alphabet (GOOGL.US.GOOG.US) and other technology companies will launch competitive consumer AI agent products. As more and more companies explore using AI to complete complex tasks, competition in the consumer AI agent market may gradually expand from model performance to multiple areas such as product experience, user retention, service integration and commercialization capability. For Meta, Instagram, WhatsApp and Facebook constitute important user distribution advantages, but whether it can convert these advantages into sustained growing usage demand for Muse still needs more time to test.