Meta Platforms' shares have seen a significant increase, trading near $734.00 and hitting a high of $741.30, due to strong investor enthusiasm for its new AI assistant, Muse. This rapid adoption is shifting the market's perception of Meta's projected $130-$145 billion in 2026 capital spending, viewing it more as a growth platform rather than just an expensive AI gamble. Wells Fargo raised its price target for Meta to $796 from $640, reiterating a buy rating, based on Muse's early success.
The excitement around Muse has also led to a substantial rally in CPU-focused semiconductor stocks. Intel surged more than 13% to about $123 a share, Advanced Micro Devices (AMD) is up 9%, and Arm Holdings is flying more than 15%. This is driven by the understanding that agentic AI applications like Muse, which automate complex tasks, increase the demand for CPUs, complementing the role of AI accelerators like GPUs. Intel's CEO noted that the company can only meet 50% of current customer demand, amplifying the impact of increased CPU interest.
While CPU makers are soaring, other chipmakers like Nvidia and Broadcom, not primarily viewed as CPU plays, saw more modest gains of 2% and 1% respectively. The iShares Semiconductor ETF (SOXX) was up 3%, confirming that the rally is specifically concentrated in CPU names. This re-pricing of processor stocks comes without any new announcements from the chip companies themselves, instead being driven by the market's reaction to Muse's consumer adoption. Qualcomm, entering the data center market with an Arm-based CPU, also saw an over 8% increase in its shares.
Despite the positive momentum, some skepticism remains regarding Muse's financial impact. Oppenheimer analyst Jason Helfstein expressed doubts about Muse reaching a financially significant scale, citing challenges with paid conversion, competition, and consumer trust. Amazon has also reportedly blocked Muse from accessing its online marketplace due to usage terms violations. However, the early success of Muse, which has paid tiers of $20 or $100 per month in addition to a free option, provides a counter to past criticisms of Meta's substantial AI spending.
