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Meta Platforms Inc. (META) is building early traction around its Muse AI platform, but BNP Paribas analyst Nick Jones says the product still needs to prove sustained engagement and a clearer path to monetization.
Jones maintains a positive view on Meta with an $885 price forecast, implying 23% upside from the cited Oct. 8 price of $720.90.
Jones said Meta Muse has accumulated more than 8.2 million downloads since its Sept. 8 launch. Downloads climbed through day 12 before stabilizing through day 23.
Meta also launched a native iPad version of Muse on Oct. 7.
Jones said Muse's early U.S. downloads surpassed Sora and ChatGPT, helped by Meta's large installed base across Instagram, WhatsApp and Facebook.
However, Muse's mobile app open rate jumped shortly after launch and then stabilized below Alphabet Inc. (GOOG) (GOOGL) Google, ChatGPT and Meta's Family of Apps.
Jones said that pattern suggests Muse has generated initial interest but has not yet built habitual engagement.
Meta currently charges partners small transaction fees, while Muse remains free at the basic level and offers monthly subscriptions for heavier usage.
Jones said long-term monetization remains uncertain, though advertising could become more meaningful if engagement increases.
He expects Meta to continue using its Family of Apps to drive Muse downloads.
Jones does not see Muse as a near-term threat to vertical marketplaces because adoption remains early and the platform lacks direct inventory, transaction capabilities and customer-service features.
He said investors should watch traction for OpenAI's Dots, competing consumer AI agents from Google and SpaceX, new partnerships and daily active-user trends.
Jones also flagged emerging security and privacy concerns around Muse, including additional privacy questions.
He said stagnant daily active users, even with steady downloads, could signal that Meta needs to adjust the product to improve market fit.
META Price Action: Meta Platforms shares were up 1.58% at $730.01 during premarket trading on Monday, according to market data.
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