Meta AI Drives Growth
Meta Shares Rise as Investors Focus on Artificial Intelligence Expansion and Infrastructure
Anonymous
Key Points
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Meta shares rose roughly 3% to about $683 in premarket trading, indicating the market reaction was measurable despite the service disruption.
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Muse is designed to act on users’ behalf by opening apps, completing forms and sending emails, placing Meta in direct competition with OpenAI, Anthropic and Alphabet in the emerging consumer-AI-agent market.
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The cause of the Facebook and Instagram disruption had not been disclosed, and Meta had not issued a public statement when the outage reports emerged; the figures came from voluntary Downdetector submissions rather than a comprehensive measure of affected users.
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Petal is being developed with NEC, Sumitomo Electric and Orange, and Meta said the cable would provide roughly twice the capacity of current leading subsea systems.
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Wells Fargo raised its price target for Meta, citing momentum in the company’s artificial-intelligence offerings.
Meta shares jumped roughly 7% to above $715 on September 21 after the company announced Petal, a massive subsea cable linking the US and France, and as investors cheered the early success of Muse, its new AI agent app. Wells Fargo raised Meta's stock price target from $640 to $796, citing momentum in the company's artificial-intelligence offerings. The gains came despite a brief Facebook and Instagram outage that sparked over 17,000 and 5,000 user reports before subsiding within two hours.
Muse, which Meta launched in early September, reached the number one spot on Apple's US App Store free chart within 10 days. The personal AI agent can open apps, fill out forms, and send emails on users' behalf—putting Meta in direct competition with OpenAI, Anthropic, and Google in the fast-growing consumer AI market. Analysts view the app's rapid adoption as proof that Meta's heavy spending on artificial intelligence could soon translate into real user engagement and revenue.
Petal Cable Doubles Capacity for Data-Hungry AI Services
Meta unveiled Petal, a 7,000-kilometer subsea cable stretching from the United States to France. The company built the cable with partners NEC, Sumitomo Electric, and Orange. When it launches in 2029, Petal will deliver roughly one petabit per second of capacity—roughly double what current leading transoceanic cables can handle.
Subsea cables carry about 99% of all intercontinental internet traffic. Rather than leasing capacity from traditional telecom carriers, Meta—like Google and Microsoft—is now building its own physical infrastructure. This move gives Meta direct control over the data layer between North America and Europe, cutting leasing costs and reducing latency for its AI services.
Muse Races to Top of Apple App Store in 10 Days
Muse is Meta's answer to ChatGPT and other consumer AI agents. Mark Zuckerberg described it as "a personal agent that understands users' goals and works continuously to get tasks done on their behalf." The app reached the number one free app on Apple's US App Store by September 18, a major milestone for a newly launched AI product in a crowded market.
Wall Street sees Muse's success as validation that Meta's multi-billion dollar AI spending is working. Ken Gawrelski at Wells Fargo said the early adoption gives Meta "a genuine AI story to tell" as it heads into its Meta Connect event. The analyst raised his price target to $796, implying strong confidence in Meta's ability to monetize these AI tools over time.
Service Outages and Regulatory Headwinds Cloud Long-Term Outlook
On the same day Meta announced its AI wins, Facebook and Instagram suffered a brief outage that generated over 17,000 and 5,000 Downdetector reports. Meta did not disclose the cause or issue a public statement. The disruption resolved within two hours, but it highlights recurring reliability concerns as the company handles more traffic.
Investors must also weigh regulatory risks. Meta faces pressure from European regulators and ongoing disputes with the UK's Online Safety Act. Wells Fargo noted Meta could face a potential $10 billion legal settlement charge in the near term. Rising debt and massive capital expenditures on infrastructure add to the financial burden, even as AI growth prospects excite the market.
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