META Stock Rips After 'Muse AI' Launch

Meta shares surged as much as 11% on Monday, their best day in more than a year, as investors cheered early user numbers for the company's new Muse AI agent.

The rally marks a sharp turnaround for the AI trade, which was rattled just over a week earlier with calls for a slower pace of AI development to head off disaster. With users embracing Muse in its first fortnight live, some investors are betting the caution could prove good news for near-term profitability too.

Latest Market Moves

• ·      Meta shares closed around $741 on Monday, up roughly 11% on the day and their strongest session in well over a year.

• Nasdaq Composite jumped 2.26% to 27,122.09 on Monday, its best session since early August, while the Philadelphia Semiconductor Index surged 4.29% as chip stocks rode the same wave of AI optimism.

• S&P 500 added 1.49% to 7,764.70 on Monday, while the Dow Jones Industrial Average lagged with a 0.71% gain, a sign of how concentrated the rally is in growth and tech names.

• Brent crude eased back toward the $100 a barrel mark on Monday and Treasury yields retreated, removing two of the recent headwinds on risk appetite.

Muse Wins Over Users

Muse is off to a fast start.

Meta's AI agent launched in the US on 8 September and racked up a record 264,000 downloads on 19 September alone, with daily active users reaching 448,000 the day before. Unlike a standard chatbot, Muse is built to complete tasks such as booking travel, filling out forms and handling email, and it is rolling out across iOS, Android, muse.ai and WhatsApp.

Meta has also lined up commercial partners to put that task-completion pitch to work, striking a deal with Shopify that lets Muse handle purchases directly inside the chat. Chief executive Mark Zuckerberg has said more partnerships are on the way.

AI Trade Roars Back

The mood around AI stocks has flipped in a matter of days.

Anthropic chief executive Dario Amodei published a 3,800-word essay on 12 September arguing that “we must slow the pace at which we improve the capabilities of A.I. models,” a call for caution that OpenAI's Sam Altman echoed with his own warnings about losing control of the technology. The essay briefly hit the sector hard two days later, with Nvidia and Broadcom both falling around 3% and a clutch of semiconductor names dropping as much as 6%.

That caution has since given way to renewed appetite for the trade, with chip names extending Monday's gains alongside Meta. AMD rose almost 10% on the same optimism, and South Korean chipmakers were among the biggest gainers in Asia overnight.

Pacing Could Pay Off For Profits

There's an ironic silver lining to the safety debate for shareholders.

Meta's second-quarter results showed what aggressive AI spending can do to the bottom line. Revenue rose 28% year-on-year to $60.8 billion, but net income fell 14% to $15.8 billion as costs and expenses jumped 55% to $42.0 billion, dragged down by a $2.4 billion legal charge and $1.18 billion in severance costs.

Capital expenditure of $31.08 billion left free cash flow at just $784 million despite operating cash flow of nearly $31.9 billion, and operating margin compressed to 31% from 43% a year earlier. If Amodei's call for a slower pace of AI development leads Meta and its rivals to temper the scale of that spending, the read for near-term shareholder profitability could be a positive one, even if the long-term AI race narrative takes a hit.

Meta Nears Breakout on the Weekly Chart

META shares have spent much of the past 18 months inside a narrowing, symmetrical triangle, with a falling trendline capping rallies since mid-2025 and a rising line of support built off the April 2024 low. Monday's surge pushed price convincingly above the upper trendline for the first time, with the 14-period RSI holding near 64 and tracing a series of higher lows even as price consolidated beneath resistance.

A weekly close above the breakout level would open the door to a fresh push toward record territory. A failure to hold it would put the pattern's support line, and the case for a false breakout, back in play.