Meta’s Next Big Growth Engine or Costly AI Trap? Wall Street Is Split

Meta Platforms Inc. (NASDAQ:META) is entering a new phase of its artificial intelligence strategy as strong early interest in Muse raises hopes for another growth engine. However, Wall Street remains divided over monetization, infrastructure spending and competition.

Analysts have pointed to strong early adoption of Muse and potential advertising upside. At the same time, questions remain about how quickly Meta can monetize the product, the cost of supporting AI workloads and whether the stock’s recent rally already reflects much of the opportunity.

Meta stock has gained nearly 13% in 2026 as record advertising revenue has helped offset investor concerns over the company’s rapidly rising AI spending.

The stock spent much of the first half of 2026 in negative territory as investors reacted to Meta’s aggressive capital spending. Shares rebounded sharply in September, climbing about 27% after the strong launch of its Muse AI assistant.

BNP Sees Distribution Advantage, but Engagement Still Matters

BNP Paribas analyst Nick Jones remains constructive on Meta, citing strong early downloads and the company’s ability to promote Muse across Instagram, WhatsApp and Facebook.

Muse surpassed 5.6 million downloads after its Sept. 8 launch, with early U.S. downloads topping those of Sora and ChatGPT.

Jones said Meta’s massive existing user base gives Muse a natural distribution advantage. However, app-open rates fell below those of Google, ChatGPT and Meta’s own Family of Apps after an initial spike. That suggests Meta still needs to turn downloads into habitual use.

He sees advertising as a potential longer-term revenue opportunity if engagement improves. However, he said the size of the monetization opportunity remains unclear.

BNP maintains a positive view on Meta with an $885 price forecast.

Needham Questions Near-Term Economics

Needham analyst Laura Martin takes a more cautious view and maintains a Hold rating.

Martin told CNBC on Saturday that Meta has not yet outlined a clear monetization model for Muse even as the product increases computing costs.

She expects Meta to focus first on building usage, consistent with its history of growing products for several years before monetizing them.

Martin said AI agents could ultimately change consumer behavior significantly. However, she believes the economics remain unproven because agents can continuously run tasks in the background, increasing computing requirements.

She also flagged Meta’s infrastructure financing as a valuation risk, arguing that investors should account for large off-balance-sheet obligations when calculating enterprise value.

Martin nevertheless acknowledged that successful Muse adoption could show Meta’s ability to create a new product engine rather than relying primarily on acquired or copied products.

Deutsche Bank Sees Broader AI Product Cycle

Deutsche Bank has taken a more bullish stance, adding Meta to its Fresh Money list.

The firm told CNBC on Friday that Muse could mark the beginning of a richer product cycle. It also believes AI could extend the durability of Meta’s advertising growth.

Tim Seymour, founder and chief investment officer of Seymour Asset Management, called Meta “safer money” and said Muse has started moving the company toward meaningful monetization opportunities.

He also argued that AI could strengthen Meta’s core advertising business even before new AI products create entirely new revenue streams.

Investors Debate How Much Upside Remains

Karen Finerman, co-founder and CEO of Metropolitan Capital Advisors, said Meta’s core business could improve. However, she cautioned that significant optimism is already reflected in the stock following its recent rally.

She said she would wait before adding more shares despite remaining long the stock.

Courtney Garcia, senior wealth advisor at Payne Capital Management, expressed a similar view. She said she would continue holding Meta but would not add new money because investors have already priced in substantial optimism.

Garcia sees agentic AI as the next stage of artificial intelligence. However, she said competition remains intense and it is too early to declare Meta the eventual winner.

META Price Action: Meta Platforms shares were up 2.35% at $745.19 at the time of publication Monday, according to Benzinga Pro data.

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