Meta shares rose 3.4% on Monday following the release of Muse Wonder, the company's latest frontier AI model. This increase occurred despite a 0.9% decline in S&P 500 tech stocks. The current market reaction is more modest compared to the 11% surge observed in September when Meta introduced its Muse AI agent.
The new model lineup includes the high-end Muse Wonder Full, which is restricted to Muse Code subscribers, and the smaller Wonder model. Developers can access the smaller version at a rate of $4 per million input tokens. This pricing strategy aligns with competitors like Anthropic, signaling a focus on subscription-based revenue models.
Analysts are evaluating the potential for subscription income to offset AI development costs. Jason Helfstein of Oppenheimer projects that 115 million subscribers paying $20 monthly could generate $28 billion in annual revenue. Meanwhile, Ken Gawrelski from Wells Fargo has increased his price target for Meta shares to $1,000.
Despite recent gains, Meta stock is trading near $742, which remains approximately 5% below the September peak of $779.82. The company also faces distribution challenges, including a recent move by Amazon to block the Muse agent from its platform over data scraping concerns. Analysts currently point to fiscal 2027 as a potential earnings low point.
