Meta’s (META) Muse Math: 10 Million Paying Users Could Mean $2.4 Billion a Year

Goldman Sachs has proclaimed Meta Platforms, Inc. (NASDAQ: META ) as a stock currently in transition. The Wall Street firm believes that the stock is moving from a "wall of worry" to a company that is well-positioned to monetize and productize compute in a manner that increases investor confidence.

On September 14, Goldman Sachs analyst Eric Sheridan reiterated a Buy rating on the stock with a $725.00 price target, implying roughly 12% upside from the share price referenced in the note. Increased conviction in the stock follows Meta's litigation settlement and the launch of AI agent Muse.

Muse is a transition from simple agents that can answer questions to a private and personal agent that can complete multi-step tasks and take actions on user's behalf. Goldman Sachs believes that Meta's existing user base gives it an edge in garnering clients for Muse, but the key question is whether monetization swiftly follows.

Muse offers three tiers. According to Goldman, the free version is capped at 100 million weekly tokens, the $20 per-month power plan comes with 500 million weekly tokens, and $100 Maximum tier offers 3 billion weekly tokens and priority access.

The bull case for Meta's Muse lies in its existing user base. In June, the social media giant reported an average of 3.6 billion daily active people across its applications. Q2 revenue reached $60.8 billion, up 28% year-over-year.

Meta's base comprising billions of existing users gives it a path to monetization that other AI agents cannot easily replicate. Even if a modest slice of the pie begins paying for the agent, Meta can generate an independent revenue line for itself.

Consider the numbers: even if 10 million users subscribe to Muse, it only accounts for 0.28% of Meta's 3.6 billion user base. A $20 power plan subscription would reap $200 million in revenues per month, or $2.4 billion annually. Meanwhile, roughly 2 million subscribers on the $100 Maximum tier would generate the same $2.4 billion, equivalent to less than 0.06% of Meta's current daily-user base.

The single biggest risk that Goldman Sachs highlights for Meta's Muse is privacy and security. Meta has just agreed to a multi-billion dollar settlement resolving claims that alleged that the company designed its products in a way that harmed user wellbeing without being upfront about the risks.

The same user base is now being asked to trust the system with extensive personal details and even the authority to make decisions, all of which are a big ask.