Meta Stock Rises 10% After Muse AI Launch: Can META Reach Citi’s $800 Target?

Key Takeaways

• Meta stock has gained approximately 10% since the September 8 launch of its personal AI agent, Muse.
• Citi reiterated its Buy rating and $800 price target, implying roughly 18% upside from Meta’s recent price near $678.
• Muse has generated strong early download momentum, while Meta One introduces a direct subscription-based route to monetizing AI.
• Meta Connect on September 23–24 could provide the next catalyst, but elevated capital spending and margin pressure remain important risks.

Meta Platforms shares have climbed approximately 10% since the launch of Muse, strengthening investor confidence that the company’s enormous AI investment may finally be producing a major consumer product.

The stock recently traded around $677.96 as Wall Street assessed Muse’s early adoption, the launch of Meta One subscriptions and possible product announcements at the upcoming Meta Connect conference.

Citi analyst Ronald Josey reiterated a Buy rating and an $800 price target while placing Meta on a 90-day upside catalyst watch. Reaching that target would represent an increase of approximately 18% from the stock’s recent level.

Muse Drives Renewed Momentum for Meta Stock

Meta introduced Muse in the United States on September 8 as a personal AI agent capable of completing tasks rather than simply responding to questions.

According to Meta’s product announcement, users can ask Muse to send emails, book travel, fill in online forms, create long-term plans and negotiate on their behalf. The agent can continue working after the user closes the application and request approval before completing sensitive actions such as sending an email or making a purchase.

Muse is available to users aged 18 and older through a dedicated app and directly inside WhatsApp. It is powered by Muse Spark, which Meta describes as its most capable model for agentic work.

The company has attempted to address privacy concerns by running each user’s agent inside a dedicated virtual machine called Muse Secure VM. Meta says the environment contains both the agent and the user’s data, while allowing users to control how much access the AI receives.

The distinction between an agent and a conventional chatbot is central to Meta’s strategy. A chatbot may explain how to book a trip, while Muse is designed to search for options, complete forms and carry out the booking process itself.

Early adoption appears to have exceeded expectations. Muse reportedly surpassed Threads, WhatsApp and Facebook in daily US downloads following its launch. Meta Chief AI Officer Alexandr Wang described it as one of the most significant consumer AI launches since ChatGPT.

The strong initial response helped Meta stock rise about 10% between the launch and September 18, according to Barron’s.

Why Citi Sees Meta Stock Reaching $800

Citi’s bullish view is based on more than Muse’s early download rankings.

Josey believes Meta’s AI product roadmap is becoming clearer, giving investors multiple potential catalysts over the next three months. These include continued Muse adoption, new subscription revenue, improvements in Reels monetization and product announcements at Meta Connect.

The $800 target represents approximately 18% upside from Meta’s recent price near $678. It also stands above the broader Wall Street average target of approximately $758.

Citi’s main arguments include:

• Muse could increase engagement across Meta’s family of applications;
• AI recommendations may improve the effectiveness of advertisements;
• Meta’s global user base gives new AI products immediate distribution;
• Subscription products could diversify revenue beyond advertising;
• New AI models and wearable devices could create additional markets.

Meta had an average of 3.60 billion daily active people across its applications in June, giving the company a distribution advantage few AI developers can match. Integrating Muse with WhatsApp removes the need for users to build a new social graph or learn an unfamiliar interface.

However, strong downloads do not automatically translate into sustainable revenue. Meta will need to demonstrate that users continue returning to Muse after the initial launch period and are willing to pay for more advanced functionality.

Meta One Creates a New AI Subscription Business

Meta’s new subscription service provides the clearest route to direct consumer monetization.

The company launched Meta One with more than 50 features across Instagram, Facebook, WhatsApp and Meta AI. Meta reported 15 million subscriptions and trials across the products during the initial rollout.

Individual plans begin at $2.99 per month, while bundled subscriptions provide higher usage limits for compute-intensive AI features. Creator and business plans add professional tools, analytics, verification and access to Meta’s business agents.

The core versions of Meta’s applications and Meta AI will remain free. Paid plans target users who want greater access to image generation, video creation, content editing and business automation.

Meta One will also expand to the company’s Edits application and AI glasses. The breadth of the service means Meta can monetize AI across consumer, creator and small-business markets without depending entirely on advertising.

The subscription model is significant because Meta has historically offered most of its social products free of charge. Even a relatively low conversion rate across billions of users could produce substantial recurring revenue.

Nevertheless, subscription growth will depend on whether the paid tools offer enough value compared with free AI services from OpenAI, Google and other competitors.

Meta Connect Could Be the Next Catalyst

Investor attention is now turning to Meta Connect, scheduled for September 23–24 at the company’s Menlo Park campus.

Meta has confirmed that the event will cover artificial intelligence, wearables, virtual reality and the company’s broader computing-platform strategy. Meta’s official event announcement describes Muse Spark as the first step in a new family of models built specifically for Meta products.

Citi expects the event to provide more information about:

• The next generation of Muse;
• Integration between Muse and Meta’s social applications;
• Meta’s AI glasses strategy;
• New developer tools and agent capabilities;
• The company’s longer-term AI model roadmap.

Analysts are also watching for information about an advanced foundation model reportedly codenamed Watermelon. Meta may not launch the model immediately, as the company is expected to add substantial computing capacity through 2027, but confirmation of its development could reassure investors that Meta is closing the gap with OpenAI, Google and Anthropic.

A convincing presentation could extend Meta stock’s rally. An event focused largely on long-term concepts without clear monetization or release dates could produce a less enthusiastic response.

Meta’s Advertising Business Remains the Financial Foundation

Muse is generating the attention, but advertising continues to fund Meta’s AI expansion.

Meta reported second-quarter revenue of $60.80 billion, an increase of 28% from the previous year. Advertising impressions across its family of applications rose 14%, while the average price per advertisement increased 12%.

Daily active people grew 3% to 3.60 billion, demonstrating that Facebook, Instagram, WhatsApp and Meta’s other applications continue to expand despite their enormous existing scale.

The company expects third-quarter revenue of between $61 billion and $64 billion. Strong engagement and more effective AI-driven recommendations could support both advertising volume and pricing.

AI already plays a role in selecting content, recommending advertisements and helping marketers create campaigns. Muse could extend that advantage by giving Meta a more direct relationship with users’ intentions, although the company would need to manage privacy and consent carefully.

The combination of advertising, consumer subscriptions and business AI tools is central to Citi’s argument that Meta can generate a return on its infrastructure spending.

High AI Spending Remains the Main Risk

Meta’s AI strategy is expensive, and recent financial results illustrate the pressure on profitability.

Second-quarter costs and expenses increased 55% to $42.03 billion. Operating income declined 8% to $18.78 billion, while the operating margin narrowed to 31% from 43% a year earlier.

Net income decreased 14% to $15.85 billion, and diluted earnings fell to $6.18 per share from $7.14. Meta also generated only $784 million in quarterly free cash flow after spending heavily on infrastructure.

Capital expenditure reached $31.08 billion during the quarter. Meta expects full-year 2026 capital spending of between $130 billion and $145 billion, largely reflecting data centers, chips and other AI infrastructure.

Investors therefore need evidence that Muse, Meta One and future AI models can generate enough engagement and revenue to justify the spending.

Other risks include:

• Slower growth in online advertising;
• Competition from OpenAI, Google and Anthropic;
• Privacy and data-security concerns surrounding autonomous agents;
• Regulatory scrutiny of Meta’s social and AI products;
• Lower-than-expected consumer willingness to pay for subscriptions;
• Delays in deploying new computing capacity or AI models.

Can Meta Stock Reach $800?

Citi’s $800 target is achievable if Muse maintains its early momentum and Meta demonstrates a credible path from AI adoption to revenue.

The company already has several advantages: billions of active users, a highly profitable advertising platform, extensive consumer data and direct distribution through WhatsApp, Instagram and Facebook. Meta One adds a subscription layer, while AI glasses could eventually extend Muse beyond smartphones.

The September 23–24 Meta Connect event will be the next test. Investors will look for evidence that Muse is more than a successful application launch and can become a platform integrated across Meta’s ecosystem.

For Meta stock to reach $800, the company may need to deliver sustained Muse engagement, continued advertising growth and clearer returns from its $130 billion to $145 billion capital-spending program.

The 10% rally shows that investors are becoming more confident in Meta’s AI strategy. Whether that momentum can carry the stock to Citi’s target will depend on how quickly the company converts consumer interest into durable earnings growth.

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