'Out of nowhere came Muse': Wall Street weighs in on Meta's AI catch-up moment

Meta Platforms ( META ) just had a mic-drop moment.

The release of its AI agent Muse is giving investors a glimpse of how AI could be monetized with consumers.

"This new Muse agentic platform is taking over the internet," Futurum CEO Daniel Newman told Yahoo Finance.

Meta's Muse has quickly climbed the app charts, racking up millions of downloads in its first two weeks. Shares of the social media giant jumped roughly 13% past week and are on pace for their best month since July 2013.

The rally is notable given the stock's various drawdowns earlier this year.

"If you were paying attention, there were signs that there were good things ahead for Meta," added Newman.

But those signals were hard to see amid growing concerns over ballooning AI capital expenditures, claims of social media addiction , and the overhang from years of heavy Reality Labs losses .

Talk of AI risks and a potential development slowdown has also cast a shadow over the industry in recent weeks

The AI conversation has focused heavily on semiconductor giants riding the agentic AI wave, as well as enterprise adoption as companies spend heavily to boost productivity.

Other names in the space, such as OpenAI, Anthropic, and Google's Gemini, had garnered most of the attention this year.

"Then out of nowhere came Muse," Newman said.

Wall Street points to Meta's reset of its AI strategy last year, including the formation of its Super Intelligence Labs and a shift toward proprietary AI models, launching its closed Muse Spark model this year

"That team has been on fire over the past year," Justin Patterson, KeyBanc managing director, told Yahoo Finance on Thursday.

Analysts are especially bullish on Muse's consumer focus, an audience notoriously hard to monetize. Unlike Meta's core social platforms, which are paid for by advertising, Muse has no ads. Instead, the company plans to make money by taking a small cut on transactions made via the agent.

"We now have a consumer-facing AI product, which frankly, many companies have struggled with," said Patterson. "So Meta's gone from being viewed as a laggard in the past couple of months, to being viewed as a leader once again."

Wall Street is watching the Muse ecosystem get built out, with expectations that revenue will increase. More downloads and connectors will translate into more revenue and return on investment.

The stock currently has 73 Buys, 6 Holds, and 0 Sells. Dozens of analysts have raised their price targets on the stock over the past week, and the consensus now sits at $787.

Ines Ferre is a senior business reporter for Yahoo Finance.