Meta Muse Launches
Thus far in the AI buildout, Meta Platforms (META) has been one of the biggest big tech spenders on AI infrastructure. Although many Wall Street pundits called Meta’s spending reckless, Meta CEO Mark Zuckerberg is again showing his ability to see massive trends before the crowd (just like he did with the Instagram and WhatsApp acquisitions). Earlier this month, Meta launched an autonomous personal artificial agent called “Muse.”
While legacy chatbots like OpenAI’s “ChatGPT” and Anthropic’s “Claude” merely answer prompts, Muse is designed to accomplish complex, multi-step tasks. While Muse is brand new, its impact is already being felt. Within a week of its launch, Muse shot to the top of the Apple (AAPL) App Store. Meanwhile, over the past month, Meta shares have woken up from a long slumber and have gained 27.4% amid renewed optimism.
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2 Beneficiaries of Meta Muse Success
Arm Holdings
Until recently, NVIDIA (NVDA) Graphics Processing Units (GPUs) have dominated the AI market as large language models rely on them for heavy AI training. However, as the agentic AI market grows in popularity, demand for Central Processing Units (CPUs) will soar. CPUs are better suited for agentic AI because they can efficiently handle the continuous, sequential logic it requires.
In March, Meta and Arm Holdings (ARM) announced a large-scale partnership to co-develop Arm AGI CPU and multiple generations of specialized silicon for Meta’s data centers. According to ARM CEO Rene Haas, Arm already has $2 billion of customer demand for its new AGI CPU. Meanwhile, Zacks Consensus Estimates suggest that Arm will continue to grow revenue and EPS at a double-digit clip through 2028.
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Meanwhile, that is not the only bullish news for Arm shares. SoftBank, which owns roughly 90% of Arm’s shares outstanding, announced that it would raise Arm’s loan facility to $25 billion (from $20B), signaling confidence in the company’s prospects. Shares are up more than 10% in early trading and are clearing multi-month resistance.
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Advanced Micro Devices
Because Muse is designed to run locally on computers to avoid cloud token fees, Meta partnered with Advanced Micro Devices (AMD) to optimize “Muse Glimmer”, an open-source model. AMD’s chips allow agentic models to run efficiently on consumer PCs. Additionally, the wave of agent demand has driven prices for AMD server chips up ~40%. In a recent interview, AMD CEO Lisa Su said that the server CPU market could exceed $120B by the end of the decade (35% CAGR) as the agentic AI segment gains momentum. Monday, AMD shares broke out to all-time highs as the company crossed the $1 trillion market cap landmark for the first time.
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Bottom Line
As the AI landscape transitions from passive chat prompts to autonomous agentic AI, Meta’s Muse has gained quick popularity. By powering the data center CPUs and local edge processing required for agentic workflows, Arm Holdings and AMD are positioned to capture immense value.
Beyond Nvidia: AI’s Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren’t likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
Apple Inc. (AAPL) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
ARM Holdings PLC Sponsored ADR (ARM) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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