Meta’s New AI Model Can Drive the Stock to Fresh Highs

Muse Spark, as what Meta Platforms (NASDAQ:META | META Price Prediction) is calling its much-anticipated closed-source model, which used to go by the codename Avocado. Undoubtedly, it’s an interesting name, and the release seems to have come at the right time, with broad markets bouncing back from the Iran war-driven slump.

While the Anthropic Claude Mythos shock has taken some time to digest, it feels like investors are more than willing to warm up to the beaten-down AI plays again, especially if the disruptive potential is as real as it seems. Indeed, in a moment of panic, just about everything moved lower together. But now that investors are calming down, I do think that the tech trade has legs, especially as hyperscalers clash and the AI race gets a bit more interesting.

Indeed, Muse Spark really jolted shares of Meta Platforms, which is now up just north of 28% from its late-March lows. But the big question moving forward is whether the hot new AI model can help Meta Platforms break out of its nine-month slump. I think it can.

With Meta AI rising up the rankings on the App Store and performance benchmarks holding up quite strongly, I do think that Meta AI is an underdog that one can no longer count out, especially as the firm leverages the tool to take efficiencies and growth into overdrive.

Meta’s AI calls for a higher multiple, at least in my view

With significant AI-driven momentum in Meta Platforms’ ad business and the potential for Muse Spark to drive margins while creating new growth pathways, I think the case of a bigger multiple re-rating is more than warranted. Even after the latest spike sparked by Muse Spark and a broad recovery bounce in the tech sector, shares still seem unsustainably cheap at 28.5 times trailing price-to-earnings (P/E).

With Bill Ackman and a bunch of other big-league investors aboard the underrated AI innovator, I think it’s time to reconsider the bull case, which may actually be closer to the base case following a successful initial launch of Muse Spark.

As Meta’s Superintelligence Labs looks to keep flooring it, perhaps it’s not all too far-fetched to think that Mark Zuckerberg and company might be ready to launch a slew of new tools, features, and agentic applications at a rate similar to Anthropic.

There’s certainly a lot of disruptive potential here. And Muse Spark’s contemplating mode seems like it could even the playing field between Meta and its models at the frontier. Add agentic commerce and applications to health into the equation, and I think Meta’s AI growth engine is just in the early days of living up to its full potential.

Muse Spark is rising up the rankings, fast!

Regarding Muse Spark’s agentic indexes score, the model is just trailing behind the likes of Google Gemini 3.1 Pro and GPT-5.4. Personally, I’m quite impressed by how quickly Meta was able to close the gap. I don’t think anyone was expecting Meta to take that top spot this quickly.

While Meta is very much back in the race, it’s going to take a bit more to pull ahead. Either way, I think Muse Spark is not all too far behind the competition. And with the tech and talent from Manus aboard, let’s just say I wouldn’t be surprised if Muse Spark winds up pulling ahead in a couple of months, if not just for a while before its rivals have a chance to respond.

Any way you look at it, Meta is back, and the stock doesn’t look appropriately priced, given the momentum behind its AI team, which is probably going to do whatever it takes to get to superintelligence. Even after that, it probably won’t stop flooring it.