Meta Platforms is experiencing its strongest monthly stock performance in over a decade, driven by the launch of its Muse AI assistant and a wave of analyst optimism. The shares have climbed 36% in September, putting the company on track for its best month since July 2013 and bringing it close to the exclusive $2 trillion market capitalization club.
The rally marks a sharp reversal from earlier in the year, when Meta shares were down 18% year-to-date following a weaker-than-expected revenue forecast in late July. Through August 18, the stock was among the 50 worst performers in the S&P 500. Since then, it has gained 43%, making it the third-best performer in the index, according to Bloomberg data.
Muse AI: The Catalyst for Turnaround
The recovery initially gained momentum after Meta agreed to pay up to $18 billion to settle a social-media lawsuit, removing a significant overhang. However, the primary driver has been the introduction of Muse, a personal AI agent designed to handle multistep tasks, such as finding information across accounts, filling out web forms, and completing online purchases. Muse is accessible via a dedicated app and WhatsApp.
Muse quickly overtook ChatGPT as the leading free iOS app in the US, recording 730,000 downloads in its first five days and surpassing 2.5 million downloads by the following Monday, according to Sensor Tower. The app also outperformed Anthropic's Claude, xAI's Grok, and Meta's existing Meta AI app on Apple's App Store.
This rapid adoption has shifted the narrative from concerns about heavy AI spending without clear monetization to expectations that AI will strengthen Meta's advertising, commerce, and hardware businesses.
Meta Connect Expands the Ecosystem
At its annual Connect conference, Meta unveiled plans to build a broader ecosystem around Muse, including the Muse Charm, a handheld device for direct access, and Meta VR Glasses, a compact VR headset priced at $1,299, scheduled for spring 2027. These devices aim to reduce Meta's reliance on smartphone platforms controlled by Apple and Google.
CEO Mark Zuckerberg described the company's ambition as building "personal superintelligence" — AI that deeply understands users and can be highly customized. "It is actually quite clear personal superintelligence will not only come first; it will be much bigger and more important," Zuckerberg said, adding that Muse would soon be available across Meta's smart glasses lineup.
Retail Partnerships Open New Monetization Paths
Meta also announced partnerships with major retailers including Walmart, Best Buy, Sephora, Wayfair, Dick's Sporting Goods, and Gap. These integrations could allow users to move from asking Muse about a product to completing a transaction, potentially creating new revenue streams beyond advertising.
JPMorgan analysts raised their price target on Meta to $920 from $820, stating that Muse has the potential to become "the most widely used consumer AI application since ChatGPT." Morgan Stanley maintained an Overweight rating and a $775 target, while Citizens raised its target to $885 and KeyBanc to $900. Cantor Fitzgerald lifted its target to $860 from $680.
Huge AI Spending Remains a Key Risk
Despite the rally, Meta faces a higher bar to justify its massive AI investments. The company is preparing to spend unprecedented amounts on AI infrastructure, and investors will be watching for evidence that these expenditures translate into sustainable revenue growth. The stock's valuation now reflects high expectations, and any disappointment could trigger a pullback.
This article is for informational purposes only and does not constitute financial advice.
