Meta stock jumps 36% in September as Muse AI fuels rally

Meta Platforms Inc. saw its stock jump by 36% in September, driven by the release of its Muse personal AI assistant. The Facebook parent's shares have surged to the top of app charts, quelling concerns that heavy spending on AI wouldn't yield profits. Analysts are optimistic about the potential revenue boost from new AI products, positioning Meta among an elite group of companies worth at least $2 trillion.

Rob Biederman, co-founder and managing partner at Asymmetric Capital Partners, believes Muse validates Meta's AI strategy. The rally marks a significant turnaround for Meta, whose shares had struggled throughout the year due to doubts about its costly AI efforts and legal risks. The stock is now the third-best performer in the S&P 500, with a 43% gain.

Meta has already announced partnerships with Instacart and Expedia, unveiling products like a palm-sized gadget for Muse and camera-free smart-glasses. However, the company still faces challenges, with heavy capital spending expected to nearly double this year and future years. Despite this, Meta's shares are trading at a below-market multiple for above-market growth, making it an attractive investment according to analysts.