Morgan Stanley raises Meta price target but flags weak Muse user retention
Morgan Stanley lifted its Meta Platforms target to $820 from $775 and kept an Overweight rating, but noted daily users of its Muse AI agent are growing slower than downloads.
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what happened
According to Stocktwits, citing CNBC, Morgan Stanley reiterated its Overweight rating on Meta Platforms and raised its price target to $820 from $775. The shares traded nearly 1% lower on Monday.
The bank said Muse is still drawing about 300,000 new U.S. downloads a day, but daily active users are rising more slowly, with 14-day retention near 20%. Morgan Stanley called this unsurprising for an early-stage agentic AI market, but said Muse needs more product innovation to build everyday habits.
Meta reports third-quarter results after the closing bell on Wednesday. Investors will focus on whether AI spending is paying off. In the second quarter, revenue rose 28% to $60.8 billion, while operating margin fell to 31% from 43%. The company guided third-quarter revenue to $61–64 billion and full-year capital expenditures to $130–145 billion.
why it matters
Retention matters more than downloads for markets, since it shows whether an AI product can generate lasting revenue. Meta's earnings and any comments on capital spending will set the tone for the stock and for large tech shares.
market impact
Meta and tech sector: the earnings report and AI spending will set the market reaction
tags
instruments
sources
- META Stock Gets A Price Target Hike From Morgan Stanley – But Firm Flags Daily Active User Growth For Muse — Stocktwits, 19 October 2026 at 15:46 UTC
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