Goldman Sachs Reiterates Buy on Meta, $725 PT

Goldman Sachs analyst Eric Sheridan reiterated a Buy rating and $725 price target on Meta Platforms Inc. (NASDAQ: META).

“With the introduction of several action-based consumer agents in the last few weeks (Spear Street Technology’s Instinct; Meta’s Muse AI; etc.), the consumer AI landscape has begun the process of undergoing a fundamental paradigm shift, transitioning rapidly from passive, conversational chatbots to proactive, autonomous agents capable of executing real-world tasks.

We see the industry moving from simply answering questions to completing complex, high-value personal workflows such as travel booking, bill negotiation, calendar management, shopping, and administrative tasks.

Muse is Meta’s full scale personal AI agent app/website.

We’d highlight a few key details/takeaways from the launch: Interface and Access: Users interact with Muse through dedicated iOS and Android applications, the web (muse.ai), and WhatsApp.

Meta designed the product around existing messaging behaviors to minimize the learning curve.

Capabilities: Powered by the Muse Spark 1.3 model family, which is optimized for long-horizon agentic tasks, Muse can autonomously browse the web, manage workflows, fill out forms, make purchases, and coordinate long-term goals.

Monetization: Meta has initially launched the Muse product as a paid subscription (Meta’s first major foray into paid consumer AI subscriptions).

Current subscription tiers include: Free Tier (capped at 100 million weekly tokens); Power Tier ($20/month for 500 million weekly tokens and faster response times); and Maximum Tier ($100/month for 3 billion weekly tokens and priority access).

We see the potential for additional monetization avenues over time, including commerce (agentic commerce capabilities with potential to charge a take rate over time) and/or advertising.

Infrastructure: Each user’s agent runs inside an isolated Linux container on a dedicated virtual machine (Muse Secure VM) in the cloud, allowing it to continue executing tasks in the background after the user closes the application.

Muse also has a number of partnership integrations to facilitate safe & secure interactions with various 3P networks, including most prominently Stripe (integration with Link’s wallet for agents to facilitate agentic commerce).

Security & Privacy: The transition from information retrieval to autonomous execution introduces several security, privacy, and transactional challenges.

To mitigate risks, Meta utilizes its Sentinel system, a system-isolated process that acts as the sole permission authority for network access and connector actions (with credentials and authentication tokens stored outside of the agent’s runtime).

Meta has confirmed that Muse data/content is fully encrypted (using the same technology featured in WhatsApp) and not shared with the company (excluded from its advertising systems, with sanitized interaction data used for model training by default unless users manually opt out).

We see a key advantage for Meta being scale & distribution (i.e. the ability to leverage billions of daily active users across Facebook, Instagram, Messenger, and WhatsApp) – by integrating identity, commerce, payments, communications, and advertising infrastructure into a single platform, Meta has a powerful user acquisition advantage that is difficult for startups/independent AI companies to replicate.

Based on past corporate priorities, it is unlikely that Meta overly emphasizes monetization with such an effort in the early adoption period & instead anchors its strategic approach to this effort building scale of adoption among users.

Lastly on consumer trust – we see any questions or hesitancy from consumers around data privacy and security as likely the biggest potential headwind for broad based adoption of consumer AI agents.

We expect consistency of performance (lack of errors in sourcing products and transaction completion) to be the biggest factor that must be executed consistently to retain and build transactional momentum among platform users.

In our note post its settlement of social media litigation a few weeks ago (link), we framed Meta as poised to begin to move from a “wall of worry” stock (around scaling/building compute given less visible return profiles vs. some of the other US hyperscalers) to a company that stood positioned to both productize and/or monetize that compute in a manner that could increase investor confidence.

We reiterate this view with increased conviction with a clearer catalyst path for the shares going forward post settlement & Muse launch (Connect event on 9/23; potential for further foundational model releases, e.g.

Watermelon; other initiatives aimed at the intersection of consumer, SMB & enterprise compute shifts toward AI). We reiterate our Buy rating & $725 PT.”

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