Meta Muse Monetization ‘Somewhat Limited’ In Near Term: Analyst

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While Meta Platforms Inc's (NASDAQ: META) Muse consumer AI agent represents a significant advance in AI product execution, monetization remains "somewhat limited" in the near term, according to Wedbush analyst Ygal Arounian.

The Meta Platforms Analyst: Arounian maintained a Neutral rating and raised the price target from $595 to $650.

Meta's stock rallied around 6% following the release of its personal AI agent, Muse.

He added the following about Muse:

  • Will operate as a freemium model, with subscriptions of $20 per month or $100 per month depending on usage.
  • Proactively assists users with personal goals and provides tailored suggestions.
  • Interacts with conversational language to help manage daily lives.
Meta Muse is an interesting development at the intersection of AI and commerce, Arounian said. It is a "brand-new-to-world product" that requires consumers to learn what an agent can do for them, he added. Any meaningful paid adoption could take time and even management has positioned the personal agent as a longer-term AI monetization opportunity.

Muse subscriptions could reach around $5 billion in 2027, representing about 1.5% of Meta Platforms' total revenue estimate, Arounian said. For what Meta calls "Business AI," the analyst's base-case assumption is roughly $1 billion in revenue in 2027.

He added that the geographic distribution could be:

  • The US and Canada creating a $3.3 billion opportunity
  • Europe representing an opportunity of $2.1 billion
Explaining the reason for the target price being raised, Arounian said, "While still taking a more measured approach on monetization, we do acknowledge progress on Meta's AI model and product improvement cadence and reflect that in our target multiple."

META Price Action: Shares of Meta Platforms had risen by 0.64% to $652.16 at the time of publication on Monday.