$META

‌Meta Platforms closed Monday at $715.72, down $36.18 or 4.81%, after trading as high as $750.42 and as low as $713.20. The stock is in pre-market trading at $719.27, up $3.55 or 0.49%, suggesting a modest attempt at stabilization after a sharp two-day pullback from record highs. The decline followed a remarkable run: Meta has gained roughly 36% in September, its best month since July 2013, driven almost entirely by investor enthusiasm for Muse, the company's new personal AI agent.

Muse launched on September 8 in the United States and September 18 in Canada, the only two markets where it is currently available. It is a multitasking AI assistant capable of performing tasks on a user's behalf, including booking trips, sending emails, and making purchases. The app is restricted to users over 18 and offers a free tier with limits on usage, plus optional subscriptions at $20 or $100 per month for more intensive use. Within less than two weeks, Muse was downloaded 1.8 million times on iPhones in North America, compared with 1.3 million downloads for ChatGPT when its app launched in May 2023. By late September, total downloads had exceeded 2.5 million, and the app had reached the No. 1 spot among free apps in the US and Canada.

At Meta's annual Connect conference on September 23 and 24, the company announced that Muse will soon be available on its smart glasses and that it had struck partnerships with retailers including Walmart, Instacart owner Maplebear, and Expedia, paving the way for it to take commissions on purchases. Meta also unveiled a palm-sized gadget for using Muse and camera-free versions of its smart-glasses lineup. The strategic logic is straightforward: Muse is Meta's attempt to move beyond advertising revenue and into agentic commerce, a market that Bain & Company projects will reach $300 billion to $500 billion in the US by 2030, accounting for 15% to 25% of the entire US e-commerce market.

Not everything has gone smoothly. Amazon blocked Muse from using its site on September 20 after accusing Meta's agentic software of failing to identify itself when browsing and of storing customers' login details. Meta insists that Muse does not see passwords or payment methods. More broadly, a survey by Oppenheimer found that only 8% of Americans would trust Meta to store their passwords for other apps, compared with 30% for Google, highlighting the trust barrier that could limit broader adoption.

The financial backdrop is equally important to understand. Meta reported second-quarter revenue of $60.8 billion, up 28% year over year, with advertising revenue growing 27% to $59.4 billion. But earnings of $6.18 per share missed the roughly $7.10 consensus, and the reason was spending. Capital expenditures hit $31.1 billion in the quarter, consuming about 98% of operating cash flow. Free cash flow shrank to $784 million. Management narrowed its 2026 capex guidance to a range of $130 billion to $145 billion, nearly double the $72.2 billion spent in 2025. Long-term debt rose to $83.7 billion after Meta took on another $24.9 billion, and the company repurchased zero shares for the second straight quarter. Capital spending is expected to swell to $197 billion next year and $215 billion in 2028, while free cash flow is projected to be negative $6.4 billion in 2026 and negative $29.2 billion next year.

Wall Street is broadly positive but divided on how much of this spending will translate into durable revenue. JPMorgan's Doug Anmuth upgraded the stock to Overweight from Neutral and raised his price target to $920, arguing that Muse could become the most widely used consumer AI application since ChatGPT and that Meta is in the early stages of releasing frontier models and AI-driven products beyond advertising. KeyBanc's Justin Patterson raised his target to $900, noting that Meta's valuation now sits at a reasonable 21x to 23x forward earnings. Monness Crespi raised its target to $830 from $730, saying the early traction with Muse has "flipped the narrative in the company's favor". Canaccord raised its target to $950 from $930, citing more than 2.5 million downloads in the first two weeks and multiple potential monetization paths. Tigress Financial's Ivan Feinseth raised his target to $995, calling Muse a paradigm shift.

The consensus among 62 analysts polled by S&P Global is a Strong Buy rating with an average price target of $761.01, though the range is wide, from $580 on the low end to $1,000 on the high end. Not everyone is convinced. Wedbush's Ygal Arounian maintained a Hold rating with a $650 target on September 24. Oppenheimer also maintained a Hold rating, reflecting concerns about monetization timing and the free tier's impact on near-term profitability. The free tier provides 100 million tokens of usage per week, which is a very significant amount and would likely be difficult for many users to consume, decreasing the likelihood of paid adoption near term. Every token Muse consumes without payment is a cost to Meta.

The technical picture on your daily chart shows a stock that has run hard and is now testing support. Meta is trading well above all key exponential moving averages. The 30-day EMA is at $659.86, the 60-day at $633.42, the 90-day at $626.15, and the 120-day at $625.19. The SuperTrend indicator, using a 10-period average with a 3x multiplier, is at $675.37 and remains in bullish territory, with the price above it. The recent high of $779.81 marked a record, and Monday's low of $713.20 brought the stock close to its 30-day EMA for the first time since the rally began. The RSI has cooled from overbought levels, and the two-day decline of roughly 6% from the high suggests profit-taking is underway. The pre-market bounce to $719 suggests some buyers are still present, but the stock is extended relative to its moving averages, and a period of consolidation would be healthy.

What should you watch in the coming weeks? The first item is Muse's monetization trajectory. The subscriptions and the commerce partnerships are the mechanisms through which the AI spending can begin to pay off, and early data on conversion rates and transaction volumes will matter more than download figures. The second item is the Amazon dispute. If other major retailers follow Amazon's lead in blocking Muse, the agentic commerce opportunity narrows. The third item is the capex outlook for 2027. Management declined to offer a 2027 figure in July, and investors will want more clarity on how long the spending ramp continues before free cash flow turns positive again. The fourth item is competitive dynamics. OpenAI, Google, and Anthropic are all pushing into agentic AI, and Meta's early lead in consumer adoption will be tested as those products mature.

The honest takeaway is this: Meta has delivered a product that the market believes in, and the stock has re-rated accordingly. The advertising business remains strong, growing at nearly 30%, and the AI spending is now beginning to show tangible consumer traction. But the costs are enormous, free cash flow is negative, and the path from downloads to revenue is not yet proven. The rally has been justified by product execution. The next phase will be judged by monetization.

This article is not investment advice. Analysis is based on publicly available information and does not guarantee future outcomes.