- Meta introduced a new AI model, Muse Spark, sending the Facebook parent company's stock higher.
- The release was followed by an onslaught of bullish notes from Wall Street analysts.
- The notes highlighted investor sentiment, competitive position, and comparisons to Google.
Meta unveiled its "most powerful" AI model to date this week and Wall Street is into it.
The new Meta large language model (LLM) competes with, and even outperforms, OpenAI and Google Gemini's most advanced offerings on some benchmarks. Meta's latest AI model sparked a slew of bullish notes from analysts at JPMorgan, Citi, Bank of America, and other big firms.
Muse Spark is the first LLM built by Meta Superintelligence Labs, with Meta indicating that more are to come. The model is available on Meta AI and is set to roll out to WhatsApp, Instagram, Facebook, and Meta's AI glasses.
The announcement came sooner than investors anticipated after reports that the model release would be delayed until May.
Meta stock has gained 10% since Tuesday's close following Wednesday's announcement.
Here's the word on Wall Street about Meta's latest AI rollout:
AI model should boost investor sentiment, JPMorgan says
JPMorgan reiterated its overweight rating for Meta stock following the Muse Spark announcement.
"We believe investor expectations for META's path to the frontier became quite low following 4Q earnings, management commentary in March, & press reports suggesting further model delays & Meta potentially leveraging Gemini in the interim," the analysts wrote.
They added, "the launch of Muse Spark should provide increased confidence in Meta's scaling trajectory and improve investor sentiment."
Citi says new AI model removes stock overhang
Citi analysts hold a buy rating on Meta stock
"Meta's launch of its Muse Spark FM creates greater visibility into MSL's product strategy as it builds out personal superintelligence and with the launch, we believe it removes a key overhang given expectation of a delayed release," the analysts wrote.
Ahead of Meta's upcoming first quarter 2026 earnings release, Citi said its watching for updates on the company's bigger AI strategy. The analysts said the Muse Spark launch is likely to lead to faster development cycles and a higher product cadence.
They have an $850 price target for the stock, representing 48% upside from Thursday's price.
A 'first big step' for Meta may mean Google-like gains to come, BofA signals
Bank of America called Muse Spark a "big first step in Meta's new LLM rollout."
"Meta has outlined a roadmap for materially improved LLM capabilities over the course of the year, suggesting scope for iterative performance gains across upcoming model releases.," analysts said.
They said Meta could see a similar trajectory to Alphabet stock, with stronger-than-expected AI model progress translating into improved investor sentiment.
"We see the current valuation as attractive given a large AI opportunity, above industry ad growth, and strong financial position for AI," they wrote.
Promising sign that Meta can compete in AI, Mizuho says
Mizuho says the earlier-than-expected unveiling of the model is a good sign for Meta in the AI race.
"We believe driving usage, particularly around its shopping mode, could unlock significant monetization potential," they wrote.
The analysts added, "We believe it will be critical for Meta to lay out more specifics around how it intends to productize its models beyond Meta AI chatbots, both from a product and monetization standpoint, to get investors comfortable with the magnitude of investment here."
Mizuho said that getting Muse Spark out ahead of earnings improves the setup.
William Blair says new AI model offers investor relief
William Blair analysts also flagged their bullish stance on Meta stock after the announcement.
"We believe that today provides a bit of investor relief that Meta has delivered on a new model after delays and some past criticism," they wrote.
The analysts said that future model progress and scale adoption will benefit Meta and help prove massive AI spending is paying off. They noted that developer adoption and incremental progress will take some time. ho
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