Meta’s New AI Agent Could Be the Missing Piece for META Stock

Meta Platforms CEO Mark Zuckerberg announced in a lengthy manifesto that everyone should have a free personal AI agent to assist with various aspects of life, and the company recently launched Muse AI to fulfill that vision. Muse AI can work on a user's behalf, interacting with apps, learning, and adapting to perform tasks the user requires.

Unlike previous attempts, Muse AI actually does the work, helping users stay organized and turn long-term goals into action plans. The launch of Muse AI addresses two key concerns for Meta: providing a missing piece to its AI strategy and exploring new revenue streams to complement its advertising business. With over 3.6 billion users across its platforms, Meta has struggled to grow its stock price this year, up only 1% year-to-date.

While the forward P/E ratio is reasonable, the company's heavy investment in AI infrastructure and large capex expenses have dampened growth prospects. Meta's Q2 revenue of $60.8 billion was dominated by advertising, while Reality Labs generated only $431 million in loss. However, other revenue from subscription efforts, including the recently launched Muse AI, shows potential for developing new revenue streams.

Muse AI is available on iOS, Android, the web, and WhatsApp, with users choosing which apps it can access and the level of access. Basic service is free, with premium subscriptions up to $100 per month. Meta also introduced Meta One, offering additional AI features and premium tools for businesses and content creators. With Goldman Sachs maintaining a Buy rating and a $725 price target, and consensus analysts rating META stock as a Strong Buy with a $758.26 price target, there is potential for upside of 14% from current levels.