Key Moments
- Guggenheim increased its price target on Meta Platforms to $850 from $700, citing higher 2027 projections and early momentum for the Muse AI agent.
- Muse reached 1.3 million daily active users within five weeks, rising from 0.3 million in its first week, though this remains below 0.05% of Meta’s 3.6 billion daily users.
- Guggenheim now estimates 2027 capital expenditures at $225 billion, up from $203 billion, and projects third-quarter core advertising growth of 25% while factoring in a $10 billion legal charge.
Target Hike Driven by Long-Term Outlook and Muse AI Progress
Guggenheim raised its price target on Meta Platforms (NASDAQ:META) to $850 from $700 in a client note on Wednesday, attributing the move to increased 2027 estimates and initial adoption of the company’s Muse AI agent.
Analyst Michael Morris told investors that the pace of Muse’s usage and the depth of user engagement are “the primary swing factor for sentiment heading into the 3Q call.”
Muse Adoption Metrics and Monetization Strategy
According to data from Apptopia cited in the note, Muse reached 1.3 million daily active users over a five-week period, compared to 0.3 million daily active users in its first week.
Despite this growth, the analyst highlighted that Muse still accounts for less than 0.05% of Meta’s 3.6 billion daily users. Morris expects Meta’s management to emphasize expanding Muse’s user base instead of targeting immediate monetization.
Over the longer term, Morris anticipates that Muse will generate revenue primarily from businesses paying to reach consumers through their agents, aligning with Meta’s existing advertising-led business model rather than relying on direct consumer spending. He pointed to the Shopify and PayPal checkout integrations as early indications of this approach.
| Metric / Forecast | Previous | Current | Comment |
|---|---|---|---|
| Meta price target (Guggenheim) | $700 | $850 | Raised on higher 2027 estimates and Muse traction |
| Muse daily active users – week 1 | 0.3 million | – | Initial usage level |
| Muse daily active users – week 5 | – | 1.3 million | Grew over first five weeks |
| Share of Meta’s 3.6 billion daily users | – | <0.05% | Muse still a very small portion of total users |
| 2027 capital expenditure forecast | $203 billion | $225 billion | Guggenheim revised higher |
| 3Q core advertising growth forecast | – | 25% | Guggenheim estimate |
| Legal charge assumption (child-safety settlement) | – | $10 billion | Tied to August child-safety settlement |
Muse Wonder and the Strategic Role of Agentic AI
Morris described Muse Wonder, which launched on Oct. 12, as an important potential catalyst, contingent on whether it enhances the broader agentic offering.
He argued that “a frontier model race without a link to agentic leadership is a competitive cost center rather than a growth investment,” and noted that he will be watching for management to explicitly connect Muse Wonder to that leadership narrative.
Morris also flagged a key concern among investors: “The prevailing concern is that a rival leapfrogs Muse or Wonder and locks Meta into a perpetual over-investment cycle, though in our view Meta’s track record (WhatsApp globally, Reels vs. TikTok) and the feedback loop from free distribution to 3.6bn users position the company as the most likely scaled leader,” the analyst added.
Updated Spending Outlook and Legal Assumptions
In addition to the higher price target, Guggenheim lifted its 2027 capital expenditure forecast for Meta to $225 billion from $203 billion.
The firm projects third-quarter core advertising revenue growth of 25% and incorporates a $10 billion legal charge related to the August child-safety settlement in its modeling.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
