Key Takeaways
- Meta Platforms saw shares decline during Monday’s premarket session, marking a potential second straight day of lossesāa first since mid-August.
- Despite recent weakness, the stock has surged 32% throughout September, buoyed by enthusiasm for its Muse AI assistant.
- Broader AI sector concerns emerged after OpenAI announced a pause in training its latest models, weighing on related equities.
- Wall Street analysts maintain largely optimistic views, with price objectives spanning $855 to $950 driven by Muse’s rapid adoption.
- Jefferies highlighted Muse’s growing usage for sophisticated tasks, describing the product as an unexpected winner.
Meta stock experienced another decline Monday morning, dropping approximately 3% before the opening bell. This followed Friday’s 3% retreat, threatening to produce consecutive down sessions for the first time in over six weeks.
Despite this recent volatility, September has delivered remarkable gains for Meta shareholders. Through Friday’s closing bell, the stock had jumped 32% for the month.
The driving force behind that surge was Muse, Meta’s consumer-facing AI assistant. Following its September 8 debut, the application rapidly ascended to leading positions across major app marketplaces.
However, the momentum appears to be moderating. Investors are now questioning whether the stock can maintain its elevated valuation.
Factors Behind the Recent Decline
Some of the downward pressure stems from developments beyond Meta‘s direct control. OpenAI disclosed that it has suspended training activities for its most advanced models, stating it will only restart once enhanced safety protocols are implemented.
This announcement has created headwinds across AI-focused equities, and Meta has not escaped the selloff. BNP Paribas analyst Nick Jones suggests that competitive dynamics now represent the primary concern for market participants.
“Going forward, we think investors should monitor anticipated releases of rival consumer AI assistants, especially from major platforms such as Google and OpenAI,” Jones stated in a Friday evening research note.
Despite these concerns, Jones maintains a favorable outlook on the shares, setting a $855 price objective. This target represents approximately 14% appreciation from Friday’s closing level.
Muse’s Revenue Path Remains Uncertain
At present, Muse generates revenue through modest transaction charges. Jones notes that the longer-term monetization strategy continues to be an area of investor scrutiny.
He acknowledges that advertising could eventually play a role, though Meta has deliberately kept Muse ad-free thus far.
Jefferies takes a more optimistic stance. The firm reaffirmed its Buy recommendation and $875 price target following its recent AI Summit, characterizing Muse as an unexpectedly successful launch.
Meta shares closed at $751.66, sitting just 1% beneath their 52-week peak of $779.82.
Jefferies reported that Muse engagement continues expanding as users entrust the platform with increasingly sophisticated activities. The firm expressed surprise at how quickly users have delegated meaningful responsibilities to Muse within just weeks of launch, ranging from settling parking violations to constructing elaborate spreadsheets.
Trading at 19 times projected fiscal 2028 earnings, Jefferies believes the valuation leaves room for further appreciation. While acknowledging forthcoming competition from Alphabet and Apple, the firm has not altered its positive stance.
Several other research firms have upgraded their targets recently. Canaccord lifted its objective to $950, referencing Muse’s 2.5 million installations during its initial two-week period.
TD Cowen increased its target to $865, citing improved clarity on AI revenue opportunities following Meta’s Connect conference. That event featured unveilings of new virtual reality hardware and AI-powered audio eyewear.
Piper Sandler also raised its target to $875, responding to CEO Mark Zuckerberg’s remarks on AI capabilities at Connect 2026. However, not all analysts share this enthusiasm.
Oppenheimer maintained a neutral Perform rating, expressing reservations about Muse’s revenue model and projected 2027 operational costs. The firm observed that Muse continues attracting roughly 340,000 daily U.S. downloads.
BMO Capital similarly exercised caution with a Market Perform rating and $580 price target. BMO referenced Meta’s upcoming VR eyewear, carrying a $1,299 price tag and scheduled for spring 2027 availability.
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