'Beyond Advertising': Analysts Align on Meta Muse as a Multi-Billion Dollar Growth Catalyst
I'm LongbridgeAI, I can summarize articles.Analysts view Meta's Muse AI platform as a multi-billion dollar growth catalyst beyond advertising. BNP Paribas cites early traction and monetization potential, while Gene Munster models up to $108 billion in subscription revenue. Jim Cramer argues Muse could re-rate Meta as an enterprise company. The news coincides with double-digit share gains and highlights significant ETF exposure.
Meta Platforms Inc‘s (NASDAQ:META) Muse platform is giving investors new reasons to value the company beyond its core advertising business.
Early adoption and potential subscription revenue helped propel the Facebook parent company’s shares to double-digit gains over the last five sessions. BNP Paribas analyst Nick Jones, analyst Gene Munster and CNBC’s Jim Cramer each highlighted different paths through which Muse could create additional value for the tech giant.
BNP Sees Early Traction, Longer-Term Monetization Potential
BNP Paribas’ Jones maintained a positive view and an $855 price forecast.
Third-party data showed Muse downloads generally increased following its Sept. 8 launch, peaking on day 12 before stabilizing. Its initial download pace exceeded Sora but trailed ChatGPT, while app open rates have settled below Alphabet Inc. (NASDAQ:GOOGL) Google, ChatGPT and Meta’s Family of Apps.
Jones sees Meta’s existing apps helping drive additional downloads. Muse currently plans to monetize through small transaction fees, although BNP Paribas sees advertising as another potential longer-term opportunity.
Munster Models Up To $108 Billion In Subscription Revenue
Gene Munster called personalized AI an "underappreciated AI growth lever" and modeled significant potential from paid Muse subscriptions.
His conservative scenario assumes 5% of Meta’s 3.6 billion daily users pay $5 monthly, generating $11 billion in annual revenue and lifting operating income by 8%.
Under a more aggressive case, 25% of users paying $10 monthly could generate $108 billion annually and increase operating income by 80%. Those estimates exclude potential transaction revenue.
Munster expects consumers to pay more for personalized AI as usage rises and free-tier limits tighten.
Cramer Sees Enterprise AI Driving A Re-Rating
Jim Cramer argues Muse could also change how investors classify Meta.
"Today you must begin to think of Meta as an enterprise company, not just a consumer company," Cramer said. "That’s how powerful Muse is."
He said that shift could explain "how an 18 times multiple goes to a 24-25."
Cramer also pointed to Meta’s effort to help "100s of millions of small businesses be more productive" and highlighted the MongoDB CEO’s move to lead Meta’s new division as evidence that enterprise software has become an important strategic focus.
Top ETF Exposure
- Invesco AI and Next Gen Software ETF (NYSE:IGPT): 9.18% Weight
- Natixis Loomis Sayles Focused Growth ETF (NYSE:LSGR): 8.12% Weight
- Invesco Nasdaq Internet ETF (NASDAQ:PNQI): 7.89% Weight
Significance: META carries such a heavy weight in these funds. Significant inflows or outflows in these ETFs will likely force automatic buying or selling of the stock.
Price Action
The company’s shares were up 0.97% at $722.59 at the time of publication on Tuesday, according to Benzinga Pro data.
Read Also: Meta Makes Its Biggest Enterprise AI Push yet, Zuckerberg Wants Businesses Running on Its AI Stack
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