Meta’s (META) Muse Math: 10 Million Paying Users Could Mean $2.4 Billion a Year

Meta Platforms, Inc. (META) recently received a "Buy" rating from Goldman Sachs, which believes the stock is transitioning from a "wall of worry" to a company well-positioned for monetization. Analyst Eric Sheridan reiterated his Buy rating with a $725.00 price target, indicating roughly 12% upside from the current share price. This optimism stems from Meta's existing user base, which Goldman Sachs believes gives the company an edge in garnering clients for its new AI agent, Muse.

Muse offers three tiers of service, ranging from a free version to a $100 Maximum tier with priority access. The company's existing user base, which reported 3.6 billion daily active people in June, presents an opportunity to monetize AI agents that other providers cannot easily replicate. Even if a small percentage of Meta's user base subscribes to Muse, the potential revenue is significant.

For instance, 10 million users on the $20 power plan could generate $200 million in monthly revenue, equating to $2.4 billion annually.

However, the path to monetization is not without risks. Goldman Sachs highlights privacy and security concerns, as Meta has recently settled a multi-billion dollar lawsuit over alleged harm to user wellbeing. Despite these challenges, Meta's vast user base gives the company a unique advantage in the AI space. The question remains whether monetization will proceed swiftly, as the success of Muse depends on convincing users to pay for its services.

Hedge funds remain heavily invested in Meta, but Goldman Sachs acknowledges that the payoff is still years away and that other AI stocks may offer greater upside potential with lower risk.