On Wednesday, Meta officially launched Muse, its personal AI agent. Morgan Stanley noted that Meta's entry signals that the competition for the "consumer agent" market, with a total addressable market (TAM) of $30 trillion, is intensifying.
Zhitong Finance APP learned that $Meta Platforms (META.US)$ U.S. stocks closed 6.55% higher on Wednesday, reaching a two-month high. On the news front, Meta officially launched Muse, a personal artificial intelligence (AI) agent, on Wednesday. Unlike traditional conversational AI, this assistant can autonomously perform tasks on behalf of users, such as sending emails and booking travel. Initially, it will be available only to users in the United States.
Muse is powered by Meta's latest AI model, Muse Spark 1.3, and can seamlessly integrate with other Meta applications. Meta aims to offer this product to the billions of users already utilizing its social media platforms. Compared to competitors, Muse features an interface closer to everyday chat, lowering the barrier to entry. Observers believe Meta is betting that by making agents simpler, the general public will be more willing to incorporate them into their daily lives.
In a research report released on Wednesday, Morgan Stanley stated that Meta's entry indicates that the contest for the "consumer agent" market, with a total addressable market (TAM) of $30 trillion, is intensifying. The report outlined why Morgan Stanley believes Meta could prevail, what investors should monitor, and the implications for other downstream participants such as Google (GOOGL.US). The firm maintained its "Overweight" rating on Meta, citing it as a top pick with a target price of $775, representing nearly 19% upside from Wednesday's closing price of $653.69.
What are Meta's advantages?
Morgan Stanley pointed out that Muse can help users automate various tasks, including online shopping, travel arrangements, ticket purchasing, appointment scheduling/calendar management, sending emails, and other use cases. Although the agent can execute tasks autonomously, users must still verify sensitive operations such as purchases or payments before final completion. Notably, Muse operates as an independent application separate from Instagram, Facebook, or other Meta apps, and currently does not share data with Meta's advertising system.
Morgan Stanley believes that leading technology platforms with scaled distribution capabilities and unique, massive datasets, such as Meta and Google, are well-positioned to create personalized consumer agent products, enhance product utility, and achieve scaled user adoption.
This represents Meta's advantage and opportunity. The firm will closely monitor consumer adoption rates and the progress of integrating data from Facebook, Instagram, Messenger, and WhatsApp into the Muse agent over time. Combined with the integration of other monetizable applications and personalized datasets—including Gmail—this could give Meta an edge in building more personalized agents and spawning new monetizable user behaviors.
The product's entry price is another notable advantage, closely linked to economies of scale. In terms of pricing, Muse offers a free version, along with two subscription tiers at $20 and $100 per month. Morgan Stanley expects that Meta's new model, Watermelon (scheduled for release this autumn), will further enhance the product's performance.
What does this mean for the stock prices of Meta and Google?
For Meta, whether the Muse agent can drive incremental monetizable user behavior represents one of the largest potential "call options" not yet priced into its stock, which is currently valued at 18 times its 2028 earnings per share. In other words, the market has not yet factored in Muse's potential success in the stock's valuation. Investors need to see user adoption rates and monetizable behaviors before Meta's stock price undergoes further re-rating.
On the other hand, if Meta's Muse gains user favor and drives monetizable user behavior at the top of the funnel, it could pose a new potential threat to Google's search business—a risk that is likewise not yet reflected in Google's valuation. This further underscores the importance of Google's own product innovation and delivery, including innovations across Search and YouTube, as well as Gemini 4's ability to return to the technological frontier.