Meta shares soar after launch of Muse AI

Meta's stock surged 4.5% on Thursday after rising over 11% on Monday, marking its biggest single-day increase since April 2025. The social media giant's Muse AI agent, which promises revenue beyond advertising, has fueled investor excitement. The share price has rebounded from a March low of around $525, following court rulings on Meta's impact on young people's mental health.

By the end of July, Meta had reported a $145 billion AI spending plan for the year, raising concerns about the profitability of such investments. Muse, introduced on September 8 in the US and September 18 in Canada, is a multitasking AI assistant, currently available to users over 18 for free with usage limits. An optional subscription at $20 or $100 per month offers expanded usage.

Within two weeks of launch, Muse reached 1.8 million downloads on iPhones in North America, compared to ChatGPT's 1.3 million downloads at its May 2023 launch. At Meta's Connect conference, the company announced Muse's future availability in smart glasses and partnerships with retailers like Walmart for commission on purchases. However, Amazon blocked Muse from using its site following accusations that Meta's software failed to identify itself and stored customer login details.

JPMorgan raised Meta's price target to $920, believing Muse could become the most widely used consumer AI application since ChatGPT. However, skepticism remains among analysts, with a recent Oppenheimer survey showing only 8% of Americans would trust Meta to store their passwords for other apps. Meta's potential growth is fueled by its user base, exceeding 3.6 billion daily users, although Threads, its X competitor, has seen slower growth, with around 140 million active daily users in January.