Meta Platforms' (META) Muse consumer agent marks progress in the company's artificial intelligence strategy, though it's unlikely to offer a "material" financial boost in the near term, Wedbush Securities said Friday.
The technology giant released the personal AI agent earlier this week. Muse is capable of proactively helping with personal goals and offers customized suggestions while interacting in conversational language for users' convenience.
The agent is available for free with a usage limit. The company is offering paid tiers at $20 and $100 per month with weekly caps of 500 million and 3 billion tokens, respectively, according to data available on its website.
"Meta's Muse consumer AI agent is a key step forward on AI product execution, but material financial impact is still under progress," Wedbush analysts Ygal Arounian and Chase Tohanczyn said in a note to clients Friday.
Muse was the second-most downloaded app on the US App Store as of Thursday with about 83,000 downloads, behind OpenAI's ChatGPT, which crossed 500,000 downloads, according to Wedbush. While the initial response to Muse has been promising, the brokerage said it sees consumer uptake over the next several quarters as "the key variable in sizing" the agent's impact in the long term.
Wedbush expects Muse subscription revenue to reach roughly $5 billion in 2027, representing about 1.5% of its total top-line forecast, based on adoption in select global markets. The brokerage's base-case scenario sees Muse AI adoption in the US and Canada creating a $3.3 billion opportunity for the company. In Europe, that opportunity is seen reaching $2.1 billion, according to the note.
In addition to subscriptions, the company could monetize Muse via advertising revenue and payments take rate, Wedbush said. In the near term, the brokerage continues to expect that Meta will prioritize compute internally versus selling excess capacity externally as it looks for signals on other AI monetization levers for the company.
"We currently view the Meta Business AI revenue opportunity as limited near-term, with the product reaching only ($1 billion) in incremental revenue at our base scenario, an implied upside of 0.2% to our (2027/2028) total revenue estimates," Arounian and Tohanczyn said.
Wedbush raised its price target on the Meta stock to $650 from $595 while remaining neutral rated.
"While moving in the right direction, we look for more consistent signals that AI investment/(capital expenditure return on invested capital) can see more meaningful levers," the analysts wrote.
In late July, Meta provided a soft third-quarter revenue outlook following an unexpected year-over-year decline in quarterly earnings. The company raised the lower end of its capital expenditure guidance at the time.
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