Key Highlights

● META shares rose 1.90% to $741.90 on Monday, October 5, on 15.22 million shares, about 58% of normal volume.

● Deutsche Bank analyst Benjamin Black estimated that Muse could generate between $2.4 billion and about $36 billion in Revenue by 2030, while a Truist Securities estimate put it at $28.5 billion or more.

● Second-quarter revenue rose 28% to $60.8 billion, but costs and expenses jumped 55% and Net Income fell 14% to $15.8 billion.

● Meta guided third-quarter revenue to $61 billion to $64 billion and full-year 2026 capital expenditures to $130 billion to $145 billion.

Meta Platforms (NASDAQ:META) got a lift on Monday from a combination of a broad technology rally and a growing chorus of analysts trying to quantify how much money its new Muse AI agent could make. The stock rose 1.90% to $741.90, one of the better gains among the market's largest companies. Volume was actually light, at 15.22 million shares, or about 58% of normal, but with the shares priced above $700, that still added up to roughly $11.3 billion in dollar volume and the eighth spot on the most-active list. In other words, Meta made the list because of its size and share price, not because of a trading frenzy.

What's driving the volume

The backdrop was supportive. The Nasdaq Composite rose 1.05% on Monday as softer-than-expected jobs data reduced expectations for further Federal Reserve rate hikes, even though the 10-year Treasury Yield climbed to 5.31%, its highest level since 2002. Large technology names led, with Nvidia (NASDAQ:NVDA), Broadcom (NASDAQ:AVGO), and Microsoft (NASDAQ:MSFT) also posting solid gains.

For Meta specifically, the conversation is all about Muse. On October 5, Deutsche Bank (NYSE:DB) analyst Benjamin Black published an analysis estimating that Muse could generate between $2.4 billion and about $36 billion in revenue by 2030, with the top of that range equal to roughly 8% of Meta's sales. His argument is that Muse can earn money on the transaction itself while also sending more dollars back into Meta's core Advertising business.

That followed a Truist Securities (NYSE:TFC) estimate on October 4 of at least $28.5 billion in additional annual revenue by 2030, built largely on the idea that Muse could collect fees when users complete purchases through the agent. Separately, Jefferies (NYSE:JEF) has reiterated a Buy rating with an $875 price target, citing Meta's AI Summit and early use of Muse.

Monday's bounce also partly recovered a pullback. Meta closed at a peak of $777.59 on September 24 before easing to $728.08 by Friday, October 2. The stock jumped 27% in September, so some investors may simply have been buying the dip after a sharp run.

The business

Meta owns Facebook, Instagram, WhatsApp, Messenger, and Threads, which together reached 3.60 billion daily active people in the second quarter. The overwhelming majority of its revenue comes from advertising across those apps. It also runs Reality Labs, which makes Quest headsets and the Ray-Ban and other smart glasses, and it is spending heavily on artificial intelligence models and data centers.

Muse, launched on September 8, is an AI agent built to complete tasks such as shopping, booking travel, and filling out forms rather than simply chat. It runs on Meta's Spark model family and offers a free tier plus $20 and $100 monthly plans. Shopify (NASDAQ:SHOP) and PayPal (NASDAQ:PYPL) have approved checkout integrations, while Amazon (NASDAQ:AMZN) blocked the agent's access on September 20. App-tracking data showed Muse reached 5 million downloads in 22 days, faster than ChatGPT did. In late September Meta extended Muse to small businesses, with connections to tools such as Slack, Zoom, and Canva, and announced an enterprise platform led by former MongoDB (NASDAQ:MDB) CEO CJ Desai.

Recent results and guidance

Meta's second-quarter results in July highlighted both the strength of the ad Business and the cost of its AI ambitions. Revenue rose 28% to $60.8 billion, with ad impressions up 14% and average price per ad up 12%. But costs and expenses jumped 55% to $42.0 billion, pushing the Operating Margin down to 31% from 43% a year earlier. Net income fell 14% to $15.8 billion, and Diluted Earnings per Share declined 13% to $6.18. Capital expenditures of about $31.1 billion in the quarter left free Cash Flow at just $784 million, and Meta suspended share Buybacks during the period while still paying its dividend.

For the third quarter, Meta guided revenue to $61 billion to $64 billion. It expects full-year 2026 expenses of $165 billion to $169 billion and capital expenditures of $130 billion to $145 billion. The stock fell nearly 8% the day after that report, before the Muse launch reversed sentiment.

Valuation

At $741.90, Meta trades at 27.95 times trailing earnings, with diluted trailing EPS of $26.55. That is slightly below Microsoft at 29.27 and Nvidia at 30.20, well below Apple (NASDAQ:AAPL) at 38.16, but above Amazon at 20.22 and Alphabet (NASDAQ:GOOGL) at 17.27. On a forward basis, Meta trades at about 22 to 23 times earnings, up from below 18 times before the September rally. The stock is no longer the bargain it looked like over the summer, but it is not priced at an extreme premium to its mega-cap peers.

Bull case

Bulls argue that Muse finally gives Meta a direct way to make money from AI, through subscriptions and transaction fees, on top of its enormous ad business. Revenue is growing at close to 30%, user reach is unmatched, and early adoption numbers for Muse are strong. If analysts' 2030 estimates prove even partly right, the current spending wave could produce a new revenue stream rather than a permanent drag on margins. Analyst sentiment is firmly positive, with a consensus Strong Buy rating.

Bear case

Bears focus on spending and legal risk. Capital expenditures of up to $145 billion this year have nearly wiped out free cash flow and pushed earnings lower even as revenue climbs. The analyst forecasts for Muse are estimates, not company guidance, and Amazon's decision to block the agent shows that rivals may resist. Youth-related trials are expected before year-end, and in a New Mexico case the state has sought up to $40 billion in penalties. History is also a caution: Meta's stock fell in October in 2021, 2022, and 2025.

Muse adoption data in Meta's next report

The next big event is Meta's third-quarter report, expected later in October, where investors will want the first hard data on Muse adoption and paid conversion, along with any update to the expense and capex outlook. The stock has moved roughly 9% to 11% over two days around each of its last four earnings reports, so a sizable reaction is possible. The youth-safety litigation and retailer access to Muse, where Amazon has already blocked the agent, remain open questions.