Meta’s Best Month Since 2013 Has It on Cusp of $2 Trillion Level

(Bloomberg) -- Meta Platforms Inc. is finally seeing the stock breakout that beleaguered bulls had been banking on.

The Facebook parent's shares have jumped 36% in September following the release of its Muse personal AI assistant, which has risen quickly to the top of app charts and muffled concerns that heavy spending on AI won't pay off. The stock is on pace for its best month since July 2013 and on the cusp of joining an elite group of companies worth at least $2 trillion.

"Muse clearly validates its AI strategy and position, after a year and a half where the stock was basically flat because people didn't know if AI was going to be a net positive or a net negative," said Rob Biederman, co-founder and managing partner at Asymmetric Capital Partners. "It's logical that AI agents will become the front door to the internet for a lot of people, which puts the balance of power in Meta's favor," he added.

This month's rally has marked a dramatic reversal for Meta, whose shares struggled for much of the year amid doubts about its costly AI efforts and legal risks stemming from lawsuits targeting its social-media business. Less than six weeks ago, Meta shares were down 18% for the year in the wake of a disappointing revenue forecast in late July, putting the stock among the 50 worst-performers in the S&P 500 through Aug. 18.

Since then, however, Meta is the third-best performer in the benchmark with a 43% gain. The recovery began after Meta agreed late last month to pay as much as $18 billion to settle a social-media lawsuit, removing a major overhang for the stock. But the biggest factor is excitement about new AI products and the potential revenue lift they could bring, which is giving investors like Biederman optimism that Meta shares have room to run.

In a sign of how impressed investors are with Muse, they've been dumping the shares of companies in a broad range of industries over fears about potential disruption, similar to selloffs earlier this year sparked by AI startup Anthropic.

Already, Meta has announced a grocery-selling partnership with Instacart-owner Maplebear Inc., as well as one with online travel agency Expedia Inc. At an event on Wednesday, Meta unveiled a number of products that analysts praised, including a palm-sized gadget for using Muse, as well as camera-free versions of its smart-glasses lineup.