Meta's Muse AI agent has climbed to the top of app store charts since its Sept. 8 launch, racking up over 2.5 million downloads and helping drive an 11% single-day jump in Meta stock. J.P. Morgan's Doug Anmuth says Muse could become the most widely used consumer AI app since ChatGPT, and the app could also feed valuable user data into Meta's advertising business beyond any subscription revenue.
Muse overtakes ChatGPT on the download charts
Meta Platforms released its Muse AI agent about two weeks ago, and the app has climbed to the top of the app store charts, ousting OpenAI's ChatGPT. Meta positions Muse as a virtual personal assistant that can book tickets, shop, and send messages on users' behalf, and it offers these capabilities to most users for free. Power users may need to subscribe to one of its paid tiers for $20 or $100 per month to get the most out of the platform.
The app's ascent led many analysts to upgrade Meta stock, and the wave of upbeat news pushed the price up 11% in a single day.
According to J.P. Morgan analyst Doug Anmuth: "Muse has the potential to become the most widely used consumer AI application since ChatGPT."
Downloads still trail ChatGPT's record pace
Since its Sept. 8 launch, Muse has racked up over 2.5 million downloads, close to but not quite on par with ChatGPT's 3.1 million downloads in the same time frame. ChatGPT was the fastest-adopted consumer platform in history, gaining 100 million users within two months of launch, and results anywhere near that would put Meta well on its way to another billion-user app. A high user count, however, won't necessarily mean Meta turns a profit on its AI spending — OpenAI is reportedly still unprofitable despite having over 1 billion weekly users.
If Muse matched ChatGPT's roughly 5.5% conversion rate to paid subscribers, 1 billion users could yield 55 million subscribers. At an average $25 a month, that would translate into about $16.5 billion in annual subscription revenue — a fraction of the over $228 billion Meta generated in revenue over the last 12 months.
The bigger prize may be advertising data
Muse gives Meta access to a stream of user data long dominated by Google and Amazon, since users explicitly tell the assistant what they want, whether a new outfit, plane tickets, or a weekend itinerary. Advertisers pay a premium for Google ads because users actively searching have high purchase intent, and Muse gives Meta an engaged base of users interacting with the app during similar moments of intent.
Meta's ad business generated revenue of $227 billion over the last four quarters, and each 1% improvement in ad pricing would add about $2.27 billion in revenue. OpenAI already started showing ads in ChatGPT earlier this year, so Meta could eventually do the same in Muse. Even after its recent pop, Meta stock trades at less than 24 times expected forward earnings, a level some see as a bargain given Muse's potential to lift ad revenue beyond any subscription income.
Source: Fool
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