Meta Platforms shares climbed 11.4% on Monday, the stock's biggest single-day percentage gain since April 2025, closing at $741.24 after touching an intraday high of $753. The move pushed the shares decisively above the $700 threshold that market technicians had identified as the key test of whether the company's recovery could become a lasting trend. Meta ended Friday at $665.75.
The catalyst was the early performance of Muse, Meta's newly launched personal AI assistant, which rose to the top of Apple's US App Store. According to market intelligence firm Sensor Tower, Muse has now surpassed 2.5 million downloads since its September 8 debut, overtaking OpenAI's ChatGPT as the leading free iOS app in the US and ranking ahead of Anthropic's Claude, xAI's Grok and Meta's own earlier AI app.
Why the $700 level matters
Investors had been searching for evidence that Meta could sustain a rebound after a turbulent year. Dan Russo, co-chief investment officer at Potomac Fund Management, which holds Meta shares, told Bloomberg earlier this month that removing a legal overhang while launching a popular product into a hot narrative was enough to begin a trend change, but that a sustained break above $700 was needed for the advance to be considered durable. Monday's close delivered that break, though the question now is whether the stock can hold the level after such a sharp one-day move. Meta was roughly flat in Tuesday premarket trading, slipping 0.2%.
The Muse enthusiasm has put Meta on course for its best monthly performance in more than 13 years, with the stock up 29.5% since the start of the month and more than 40% above its 52-week low set in March, when higher spending projections triggered a steep selloff.
AI spending finally has a revenue story
Meta's heavy AI capital expenditure has been the central concern weighing on the shares. The company is on track to spend between $130 billion and $145 billion this year, mostly on physical infrastructure such as data centers. While its core advertising business continues to grow quickly, investors had questioned whether Meta could generate meaningful AI revenue beyond improving its existing recommendation and ad systems.
Muse offers an early answer. The personal AI agent is built to carry out multistep tasks, including locating information across accounts, completing web forms, and negotiating and executing online purchases. Users can access it through a dedicated app or WhatsApp. Chief executive Mark Zuckerberg has framed the company's broader ambition as a pursuit of "personal superintelligence" — technology that understands users deeply and can be heavily customised.
Monetisation paths beyond advertising
The app is free at its basic tier, with additional subscription levels priced at $20 and $100 per month depending on usage, giving Meta a potential AI revenue stream that does not rely directly on advertising. A second avenue is the Meta Model API, through which developers and enterprise customers can pay for access to the company's underlying AI models.
Wells Fargo analyst Ken Gawrelski raised his price target on Meta to $796 from $640 on Monday, citing Muse's early traction. He pointed to Sensor Tower data showing a record 264,000 US downloads on September 19 and 448,000 daily active users on September 18, and said recent model launches including Muse Spark 1.3 and the Muse assistant mean the company now has a story to tell around its AI capabilities. Mizuho analyst Lloyd Walmsley described the release as a meaningful step toward demonstrating positive financial returns on Meta's substantial AI capital expenditures.
How analysts are repricing the stock
Wells Fargo's new target is based on 25 times its 2027 earnings estimate, up from a prior multiple of 20 times, broadly in line with Meta's current P/E ratio of about 25.3. The firm trimmed its 2027 earnings-per-share estimate to $31.86 from $32.07 and nudged its 2028 figure to $38.75 from $38.73.
A growing number of analysts argue Meta had been structurally undervalued relative to its Magnificent Seven peers. Morgan Stanley's Brian Nowak has compared the current setup to Alphabet's position in late 2025, when the Google parent benefited from a favourable antitrust ruling followed by a string of new AI products. Nowak wrote in an August 30 note that Meta is positioned to keep releasing new products, which in aggregate could add more than $10 to EPS, and that these prospects do not appear priced in. JPMorgan also upgraded Meta to overweight earlier this month, citing Muse's strong early traction.
This article is for informational purposes only and does not constitute financial advice.
