Why Meta Platforms Stock Rallied on Monday
Shares of Meta Platforms (META +5.40%) rallied on Monday, gaining as much as 5.6%. As of 12:47 p.m. ET, the stock was still up 5.1%.
The broader market rebound no doubt contributed to the move, but bullish commentary from a Wall Street analyst helped push the social media and artificial intelligence (AI) specialist higher.
Image source: The Motley Fool.
Bullish take
JPMorgan analyst Doug Anmuth added Meta Platforms to the investment bank’s Analyst Focus List, calling it a preferred internet stock. The analyst cited the robust growth in the company’s AI-powered ad sales and the potential represented by its Muse AI models. Anmuth maintained its overweight (buy) rating and $940 price target on the stock. For those keeping score at home, that represents potential upside of 54% compared to Friday’s closing price.
A quick look at the company’s recent results supports the analyst’s bullish position. In the third quarter, Meta delivered revenue that grew 26% year over year to $64.6 billion. Moreover, diluted earnings per share (EPS) rose 265% to $3.83. Excluding a one-time charge to settle litigation, Meta’s EPS of $7.40 would have risen sevenfold.
META – Meta Platforms
$643.10+$32.95 (+5.40%)
NASDAQ · As of 1:04 PM ET 11/09/26
Furthermore, the company’s potential to monetize its Muse AI personal AI agent shouldn’t be overlooked. The Muse app had been downloaded more than 5 million times within three weeks of its release — outpacing ChatGPT, which took 56 days to reach that benchmark. Muse has since surpassed 10.9 million downloads, according to digital intelligence and market analytics company Sensor Tower. Moreover, it remains one of the top-ranked apps on both the Android and Apple app stores.
Muse’s popularity has the potential to turn into profit. Beyond its limited free tier, Meta charges $20 per month for its Power tier and $100 per month for its Maximum tier. While estimates vary, Muse could generate incremental revenue of $27 billion by 2030, according to Citigroup. The AI agent is increasingly helping users search, compare, and complete transactions online.
To be clear, the company still faces ongoing litigation as several cases wind their way through the courts. That said, much of that risk is already baked into Meta’s stock price, and at less than 22 times earnings, the potential upside far outweighs the risk.
JPMorgan Chase is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Danny Vena, CPA has positions in Apple and Meta Platforms. The Motley Fool has positions in and recommends Apple, JPMorgan Chase, and Meta Platforms. The Motley Fool has a disclosure policy.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.