Morgan Stanley's latest research report notes that the Muse personal AI assistant ecosystem at Meta Platforms (META.US) continues to expand and could open new growth avenues through lighter VR glasses and other new products. The firm maintains its "Overweight" rating on Meta with a price target of $775 and keeps it as a top pick.

Muse Ecosystem Expansion: Retail Giants Like Walmart Join In

The report points out that Meta recently announced Muse partnerships with several retailers including Walmart, Best Buy, Dick's Sporting Goods, and Gap. Morgan Stanley believes these "connectors" help eliminate friction in users' shopping and purchasing processes, ultimately unlocking a total addressable market (TAM) of roughly $30 trillion in consumer agentic spending. Morgan Stanley states that while transaction commission rates are expected to be extremely low, even negligible, Meta is focused on building and expanding its ecosystem of users, engagement, and commercial activity for long-term monetization. The report also notes that keeping commissions low will pressure future competitors' agent products, and Google and other private companies may need to follow with similar terms or risk losing market share. Additionally, Walmart's participation could prompt Amazon to follow suit to avoid long-term share loss.

Voice and Wearables: Muse Voice Launching Soon, Full AR Glasses Integration

On the voice and wearable front, Meta showcased a new voice feature called Muse Voice, expected to launch in the coming weeks, which will enable Muse to respond to users in a personalized, customized, and conversational manner. At the same time, Muse will be fully integrated into Meta's latest AR glasses (all brands), allowing users to talk to Muse through the glasses without taking out their phones, potentially driving greater adoption, engagement, and use cases while unlocking more long-term commercial opportunities.

Expansion Continues: Muse to Enter More Markets, Integrate with Apple Computers, and Launch a Dedicated Email

Meta is expected to launch Muse in more countries beyond the U.S. and Canada soon, and announced that Muse has been integrated into Apple computers. Muse will also soon have its own email address, which will make it a more powerful assistant and could over the long term shift user behavior from Gmail to Meta's email/chat system.

New Hardware Moves: Muse Charm and Lightweight VR Glasses

Meta also showcased a handheld/keychain-style device called Muse Charm, expected to ship during the holiday season. Although details are limited, the Charm is very compact and lets users interact with Muse on the go, further integrating Muse into consumers' daily lives. In addition, Meta unveiled a lightweight VR glasses product weighing less than one-fifth of the Quest 3, with an appearance more like regular glasses than a bulky headset. The product will launch next spring starting at $1,299 and directly integrates Muse functionality into the operating system. The new glasses will combine VR/3D gaming, entertainment (movies, TV, concerts/events, with 100 live sports broadcasts expected in 2027), and productivity tools (a full virtual multi-screen dynamic desktop and keyboard). Morgan Stanley says that although it had previously been skeptical about Meta's AR/VR investments, this product represents a significant improvement in size and performance and could become an important catalyst for the stock price in 2027. The report emphasizes that the current share price does not yet price in any success in the AR/VR business.

Core Thesis: Meta Is Advancing a Structural Transformation, Three Underappreciated "Call Options"

Morgan Stanley assigns Meta an "Overweight" rating with a $775 price target and a bull case of up to $1,000. Morgan Stanley believes Meta is undergoing a structural transformation, focusing on multi-year efficiency, productivity, and leaner operations. The firm notes that the "Year of Efficiency" is not just a short 365-day adjustment but a structural shift in operating model and corporate culture, aimed at operating more leanly and focusing more on investor returns, even during investment cycles. At the same time, revenue and engagement trends on Meta's platforms are also improving. Morgan Stanley's conversations with the industry and the company show continued progress in Reels engagement and monetization, as well as optimization in post-IDFA advertising measurement and attribution. Furthermore, Morgan Stanley identifies three underappreciated "call options": 1) further AI-driven upside; 2) subscription service adoption; 3) growth in click-to-message advertising.