Could Meta's viral Muse app be the company's ChatGPT moment?

By Christine Ji

Meta's new assistant is topping App Store charts and beating ChatGPT's early download pace, spurring renewed confidence in the company's AI strategy

Investors are also looking ahead to Meta's next-generation AI model "Watermelon," expected to release late next month.

Meta's new artificial-intelligence assistant has surged to the top of Apple's U.S. App Store, becoming a surprise consumer hit that's also turning heads on Wall Street.

Unlike traditional chatbots, Meta's (META) Muse is designed to execute multistep tasks like booking reservations, making phone calls and sending emails. Its wild popularity is giving analysts confidence that Meta can use its deep social-media roots to make a viral application in the AI age.

"While it is still early, we believe that Muse has the potential to become the most widely used consumer AI application since ChatGPT," JPMorgan analyst Doug Anmuth wrote in a Tuesday note.

It's a serious breakout moment for Meta, whose AI strategy has largely been dismissed until recently. Anmuth upgraded his rating on the stock to overweight earlier this month after the launch of Muse. Since the beginning of September, shares of Meta have risen nearly 30%.

Anmuth highlighted Muse's user-friendly interface, generous free tier and Meta's distribution advantage across various social-media platforms.

Meta has sped up the pace of its AI launches recently, Anmuth added. He flagged that Meta's AI models have displayed large leaps in capabilities in just a few months. The launch of Muse Spark 1.1 in July marked the first time Meta had released an AI model with near-frontier coding capabilities.

With Meta's developer conference, Meta Connect, taking place this Wednesday and Thursday, Anmuth expects further updates on the company's AI progress and how Muse can integrate with partners and Meta hardware.

Top of mind for investors will be the release date of Meta's next new model, dubbed "Watermelon." Analysts believe that Watermelon will likely be released later next month.

Jefferies analyst Jeffrey Favuzza wrote in a Tuesday note that heightened enthusiasm going into Meta Connect could potentially lead to a "sell-the-news event," especially after the stock popped 11% on Monday. But with the catalyst of an upcoming model release, "we have a more durable floor in the stock," he said.

The stock slipped 0.6% on Tuesday in up-and-down trading.

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Investors had previously been concerned with Meta's abilities to build a differentiated AI product, Bank of America's Justin Post believes. But Muse's wild popularity and ability to complete complex tasks, such as filling out web forms, has spurred increased "optimism on Meta's potential AI investment returns," Post wrote in a Tuesday note.

Muse's cumulative U.S. downloads have outpaced other AI apps over a comparable post-launch period, Post added. According to data from Sensor Tower, Muse reached 1.43 million downloads in the 12 days following its launch, compared with OpenAI's ChatGPT at 1.37 million and Gemini at 0.71 million.

Post did caution that Muse's popularity might not translate into a revenue boost immediately. "The monetization path for Muse, including ads, subscriptions and commissions, seems unlikely to be material before 2028," he said.

However, Post is optimistic that Meta's upcoming Watermelon launch could bring frontier-level capabilities and potential to improve Meta's core advertising business as well as revenue from hosting models.

-Christine Ji

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09-22-26 1726ET