Meta Platforms (META): Its Next AI Growth Engine Is Starting to Take Shape
Meta Platforms (META) has already shown how effectively it can use artificial intelligence to improve its advertising business. Now the company is beginning to push AI into entirely new products, and the early response suggests this could become another meaningful growth engine.
Meta launched its personal AI agent app on Sept. 8, powered by its Muse Spark family of models. The debut was impressive. The Muse AI agent climbed as high as No. 3 in the U.S. App Store on its second day, while early usage was running at 10 times the levels Meta saw in its training cohorts.
We think that early traction is particularly important because Meta is still at the beginning of its AI product rollout. The company released the latest version of Muse Spark last week and is also developing API access to its models, giving Meta potential opportunities to monetize AI through both consumers and developers.
For now, monetization isn’t the primary goal. Meta’s new AI agent app offers both free and paid subscription tiers, but the bigger focus appears to be adoption. If Meta can establish a large user base first, it could have multiple ways to generate revenue later.
And unlike many companies investing heavily in AI, Meta already has an enormous advertising business that can benefit from the same technology. AI is improving content recommendations and engagement, while also helping with ad targeting, retrieval and content creation. That means Meta doesn’t have to wait for its newest products to generate revenue before AI begins contributing to the business.
There is a significant cost to this strategy. Building frontier AI models and serving potentially massive numbers of users requires enormous computing capacity. JPMorgan now estimates Meta’s free cash flow could be negative by $65 billion to $75 billion in both 2027 and 2028 as spending increases. Importantly, those forecasts don’t include any potential monetization from Meta’s new AI products.
We think that’s a risk worth watching, but the early adoption of Muse gives us more confidence that Meta is spending against a real opportunity rather than simply chasing the AI trend.
The stock trades around $654 per share. JPMorgan upgraded Meta from Neutral to Buy on Sept. 10 and raised its price target to $820, implying roughly 30% upside from Wednesday’s close.
The broader analyst outlook is also strongly positive. Of the 64 analysts covering Meta, 56 rate the shares Buy or Strong Buy and eight rate them Hold. None recommend selling. The average price target is $755.24, with the highest target at $1,000.
We see two distinct AI opportunities developing at Meta. The first is already strengthening its core advertising business. The second is only beginning to emerge through Muse, AI agents and access to Meta’s frontier models.
The spending required to pursue those opportunities will be substantial, particularly in 2027 and 2028. But with Muse reaching No. 3 in the U.S. App Store almost immediately and early usage running at 10 times training-cohort levels, we’re encouraged by what Meta is seeing so far.
At around $654 per share, we think Meta offers an attractive way to invest in both the current benefits of AI-powered advertising and the possibility of an entirely new AI business taking shape alongside it.
