Meta Platforms Inc. (NASDAQ:META) is closing the gap with Anthropic in artificial intelligence, giving Guggenheim Securities fresh reason to back the stock. The next test is turning those gains into a business through its Muse AI agent.
Analyst Michael Morris maintained a Buy rating and raised his price target to $850 from $700 in an Oct. 14 note, citing higher 2027 estimates and the longer-term opportunity in agentic AI.
Meta now scores 56 on the Artificial Analysis Intelligence Index, behind only Anthropic’s 58 among the companies in the note’s comparison. Guggenheim sees the launch of Muse Wonder as a potential catalyst, provided the model’s capabilities translate into a more useful agent.
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The Big Question: How Does Muse Make Money?
Guggenheim expects Meta to follow a familiar playbook: let consumers use the product for free, then charge businesses to reach them.
“Over time, we believe Muse monetizes primarily through businesses paying to reach consumers through their agents, consistent with the economics of Meta’s core advertising business, rather than consumer wallets,” the analysts wrote.
The firm expects management to prioritize growing usage before near-term revenue. Muse reached 1.3 million daily active users after five weeks, up from 300,000 in its first week, according to Guggenheim’s analysis of Apptopia data.
Even so, that audience represents less than 0.05% of Meta’s 3.6 billion daily users. Guggenheim views free distribution across that enormous potential audience as an advantage as Meta competes to make AI agents part of everyday shopping, travel and scheduling.
A Costly Opportunity
Guggenheim raised its 2027 capital expenditure forecast to approximately $225 billion from $203 billion and expects free cash flow to remain under pressure through 2028.
A rival breakthrough could also force Meta into a prolonged spending race. Morris nevertheless pointed to the company’s record with WhatsApp globally and Reels against TikTok as reasons to believe it can emerge as a leader at scale.
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Guggenheim expects agent monetization to ramp more significantly beyond 2027, supporting its willingness to assign Meta a higher valuation now. On the third-quarter earnings call, the firm will look for management to connect stronger models with a stronger agent business.
Without that connection, the analysts warned, the frontier model race becomes “a competitive cost center rather than a growth investment.”
META Stock Price Activity: Meta Platforms shares were down 3.17% at $738.32 at the time of publication Wednesday, according to Benzinga Pro.
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