Meta's latest rally kicked into gear after Muse, its personal AI assistant, took off with users, easing worries that the company's outsized AI investments might not translate into business results. That burst put September on pace to be Meta's best month since July 2013 and moved it close to the small circle of companies valued at $2 trillion or more. Early Friday trading cooled things down, with the stock dropping more than 3% and trimming the week's advance to about 13%.
Just under six weeks ago, the setup looked very different. After a muted revenue guide in late July, Meta's year-to-date return was negative 18%, placing it within the 50 poorest performers in the S&P 500 as of Aug. 18. Since then, the shares have flipped to one of the index's standouts with a gain near 40%.
The tide began to turn late last month after Meta reached a settlement agreement tied to a social-media lawsuit that could amount to $18 billion, easing a major legal overhang. The larger spark is investor excitement about new AI tools and what they could add to revenue.
Asymmetric Capital Partners co-founder and managing partner Rob Biederman said, "Muse clearly validates its AI strategy and position, after a year and a half where the stock was basically flat because people didn't know if AI was going to be a net positive or a net negative." He added, "It's logical that AI agents will become the front door to the internet for a lot of people, which puts the balance of power in Meta's favor."
Meta announced a grocery-commerce tie up with Instacart owner Maplebear Inc. and another with Expedia Inc. At a Wednesday event, the company rolled out a palm-sized device for using Muse and introduced camera-free versions of its smart glasses, earning favorable nods from analysts. The buzz around Muse has also spooked investors in a wide range of other sectors over fears of disruption, echoing the selloffs seen earlier this year around Anthropic.
JPMorgan's Doug Anmuth lifted his rating on Meta to overweight from neutral on Sept. 10, writing, "There's still meaningful upside potential as Meta is in the early stages of releasing frontier models and AI-driven products beyond advertising."
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Meta's checkbook is wide open. This year's capital spending is projected to land near $140 billion, about twice the roughly $70 billion it spent in 2025. Forecasts call for that figure to rise to $197 billion next year and reach $215 billion in 2028.
On the income statement, analysts see 2026 sales climbing 26% to $254 billion and net income up 33% to $80.6 billion, based on Bloomberg estimates. Growth is expected to moderate next year, with revenue up 20% and profit up 9%.
The stock trades at 21 times earnings expected over the next year, according to Bloomberg data. That is well above June's sub-14 trough, roughly in line with Meta's three-year average, and a bit cheaper than the Nasdaq 100 at 22 times. More than 90% of analysts tracked by Bloomberg rate the shares a buy, though the price is hovering near the average target, hinting at limited upside over the next year.
"Right now Meta offers a below-market multiple for above-market growth, which is attractive on its own, but it also has massive scale and distribution, which are advantages that will be really hard for competitors to overwhelm," Biederman said. Still, volatility cuts both ways. Brandon Pizzurro, chief investment officer at GuideStone Funds, which oversees $29 billion, cautioned, "Sentiment on the big players seems to change as often as new AI models get released, and something like Muse gives markets the sugar rush of a new catalyst, but there's an increasingly high bar to impress investors, and rightful trepidation on whether these companies can deliver."
The setup is simple to grasp and hard to price: fast product traction, a cleared legal cloud, and a valuation that is not stretched versus big-tech peers, set against colossal AI spend and a growth slowdown penciled in for next year. That kind of mix can reward patience or whipsaw nerves, sometimes in the same week.
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