Meta Trots Out 2 New AI Models
Here’s where Meta’s AI subscription figures become more than just interesting.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
Hot on the heels of our conversation about Meta (META) Muse usage metrics in Monday’s video, the company introduced two AI models, Muse Wonder and Muse Wonder Full, designed to handle tasks such as reviewing legal documents, navigating insurance claims, and developing software.
Muse Wonder is available to developers through Meta’s Model API and Muse Code, and also be integrated into the company’s Muse assistant, initially for subscribers. That of course means that to access it, you’ll need to have a subscription plan. Muse Wonder Full will only be available to developers who sign up to the company’s software engineering focused Muse Code AI agent under a $50 or $200 a month subscription plan.
While advertising should continue to drive the vast majority of Meta’s overall revenue stream, we see this supporting its efforts to diversify that stream with subscriptions. We’ve long felt subscription business models at scale bring a more predictable revenue, earnings and cash flow stream. We still prefer membership business models, like those found at American Express (AXP) and Costco (COST), but success on this front could eventually lead the market to revisit how it values META shares.
In our view, subscription revenue would need to become at least a double-digit revenue driver for the market to take notice. Exiting Q2 2026, Meta had 3.6 billion daily users across its platform of apps. Subject to the average monthly subscription price point for its models, Meta would only need to convert 0.5% to 1.0% of its daily user base to replicate 20% of the expected $31 billion Wall Street sees Meta delivering this year.
This means there is potential for upside to consensus EPS figures for Meta in H2 2026 and relative to what the market expects next year. That is why we are following the Muse retention figures tracked by Sensor Tower. While 6.6 million downloads is a good start and the 14-day retention figure of 22% or 1.45 million is a good start, Meta will need to grow the subscription base to somewhere between 13 and 18 million to job Wall Street into reconsidering how it values the shares. To be clear, that’s not 13 to 18 million downloads or repeat visits but paying subscriptions.
As such, we expect this to be a big area of focus when Meta delivers its Q3 2026 results in late October.
More Pro Portfolio
- Picking Up More Shares of This Holding After Multiple Wins
- Tracking 33 Signals Across 9 of the Pro Portfolio’s Investment Themes
- Weekly Roundup: Oil, Yields and AI Jitters Make for a Choppy Climb
At the time of publication, TheStreet Pro was long META shares.
