Meta Platforms Inc. (META  ) remains a major AI investment story as the company expands its infrastructure partnerships, scales Muse internationally and works to turn rising AI usage into profitable revenue.

The stock traded nearly 1% lower Tuesday even as the S&P 500 gained 0.5%, and the Nasdaq advanced 0.97%. Communication Services rose 0.1%.

Nvidia Expands AI Partnership With Meta

NVIDIA Corp. (NVDA  ) and Meta expanded their AI partnership around Meta's Muse family of models, while NVIDIA plans a $3 billion equity investment tied to Meta's equity offering.

The companies aim to improve training and inference performance while lowering operating costs.

Their expanded collaboration also includes NVIDIA's OpenShell Reference Architecture, OpenShell for secure AI-agent deployment and NVIDIA Sentry for monitoring agent behavior.

BNP Paribas Sees $8 Billion Muse Opportunity

BNP Paribas analyst Nick Jones maintained an Outperform rating and a $940 price forecast, implying 49% upside from the Oct. 26 reference price of $630.60.

Jones estimates Meta spends about $180 annually, or roughly $15 per month, to serve the average free-tier Muse user.

He estimates monthly costs of about $90 for Power users and $570 for Maximum-tier users, leaving the product unprofitable at current cost levels.

Cost Reductions Could Drive 2027 Break-Even

Jones said Meta aims to reduce Muse serving costs by 10 times over the next year, which could allow the product to reach gross-profit break-even as early as 2027.

However, he cautioned that users may consume more tokens as they find additional uses for Muse, potentially offsetting some efficiency gains.

Jones believes Meta would need users to complete dozens of transactions annually to break even without substantial cost reductions.

Muse Revenue Could Top $8 Billion By 2028

Jones estimates Muse could generate more than $8 billion in incremental revenue by 2028 with positive gross margins if Meta combines subscriptions with payment transaction fees and advertising.

He said monetization could take longer as Meta experiments with business models and continues prioritizing adoption and engagement.

Jones highlighted Muse's recent launch in Japan and expects additional international rollouts.

He sees Meta's large existing distribution base as an advantage in attracting users and testing new monetization approaches.Technical Analysis

Meta trades 11.4% below its 20-day SMA and 5.8% below its 50-day SMA, reflecting weaker near-term momentum.

The stock also sits 0.6% below its 100-day SMA and 0.8% below its 200-day SMA, leaving it just under its longer-term trend measures.

Top ETF Exposure

The Invesco AI and Next Gen Software ETF (IGPT  ) holds an 8.32% weight in Meta, while the Natixis Loomis Sayles Focused Growth ETF (LSGR  ) carries a 9.04% weighting.

The VanEck Communication Services TruSector ETF (TRUC  ) holds a 9.46% weight in the stock.

Significant inflows or outflows from these funds can translate into corresponding trading activity in META shares.

META Price Action: Meta Platforms shares were down 1.00% at $624.26 at the time of publication on Tuesday, according to Benzinga Pro data.