Key Takeaways
- Meta’s Muse rally helped push its NTM P/E from roughly 17x at its 2026 low to about 22x, even as earnings estimates moved much less dramatically.
- Meta is building a commercial path for its AI technology through Meta Enterprise Platform and the hiring of MongoDB CEO Chirantan “CJ” Desai.
- Investors can watch EPS revisions and free cash flow to see whether Muse’s financial impact catches up with the valuation re-rating.
Meta Platforms (NASDAQ: META) has added hundreds of billions of dollars in market value since launching Muse, but the rally has moved faster than Wall Street’s earnings forecasts.
On the September 22 episode of The Compound and Friends, Josh Brown said Meta added between $400 billion and $450 billion in market value in three weeks, as shares climbed from about $578 at the start of September to roughly $740 to $750. By September 25, Meta had gained 32% over the previous month before shares pulled back 4%, according to 24/7 Wall St..
The size of that move raises the key question for investors: how much of the Muse rally reflects higher earnings expectations, and how much comes from investors simply being willing to pay more for those earnings?
Muse Has Already Changed What Investors Are Willing to Pay for Meta
Michael Batnick captured the valuation argument on the September 22 episode of The Compound and Friends, saying, “we’re basically saying this one product is a 20% bump on the multiple of earnings that people are willing to pay.”
Batnick was referring to an unnamed analyst who moved from valuing Meta at 20x earnings to 25x. That is mathematically a 25% increase, although Batnick described the change as a “20% bump.”
Rich Greenfield made a similar point about Meta’s valuation on CNBC’s Squawk Pod, saying Meta had been “penalized valuation-wise” until the recent shift in sentiment.
TIKR’s valuation data shows how quickly that changed.
Meta’s NTM normalized P/E has rebounded from roughly 17x at its 2026 low to about 22x today. That remains close to its three-year average of roughly 23x, so Meta is not trading at an extreme multiple compared with its recent history.
Instead, investors have rapidly removed the valuation discount that existed only a few months ago. Muse has changed what investors are willing to pay for Meta’s future earnings before the product has had much time to affect those earnings.
Now Meta’s Earnings Estimates Have to Catch Up
The next test is whether Wall Street’s profit forecasts follow the stock higher.
TIKR consensus estimates call for normalized EPS of about $6.74 for the September 2026 quarter and $8.34 for December, followed by roughly $8.53, $8.69, and $8.70 in the subsequent quarters shown on the chart.
Those forecasts have not moved anything like Meta’s share price or valuation multiple.
That gap does not necessarily mean the rally has gone too far. Analyst estimates can lag a new product while Wall Street assesses adoption, pricing, revenue potential, and margins. If Muse becomes a meaningful revenue stream, EPS estimates could still move higher.
But the sequence matters. Investors have already re-rated Meta. Now earnings revisions need to show whether Muse can support that re-rating.
Meta Is Turning Muse Into a Business
Meta is already moving to commercialize the technology beyond its initial Muse launch.
On September 28, Meta announced Meta Enterprise Platform, which Mark Zuckerberg called the company’s “next major pillar.” Meta said the platform will initially bring Muse, Meta Business Agent, Muse API, Muse Code, and other technologies to businesses and developers.
Meta also hired MongoDB CEO Chirantan “CJ” Desai as Chief Enterprise Platform Officer, reporting directly to Zuckerberg. TIKR previously covered Meta’s hiring of Desai, who will lead the company’s new enterprise operation.
The move gives Meta a clearer route to monetizing its AI technology. Instead of relying only on consumer adoption, Meta is building an enterprise business around the same AI stack behind Muse.
Meta’s AI Push Comes With a Cash Flow Test
The other side of the Muse opportunity is the cost of building the AI infrastructure behind it.
TIKR data shows Meta generated $10.63 billion in free cash flow in the September 2025 quarter, $14.08 billion in December, and $12.39 billion in March 2026, before free cash flow fell to $784 million in the June quarter.
That decline comes as Meta’s AI spending accelerates. 24/7 Wall St. cited Zuckerberg’s 2026 capital expenditure plans of $130 billion to $145 billion, raising the pressure on Meta’s AI investments to eventually produce returns.
TIKR consensus estimates shown in the chart call for free cash flow to turn negative during the forecast period. Meta ultimately needs its AI investments to translate into earnings and cash generation, not just a higher valuation multiple.
What META Investors Should Watch Next
Muse has changed Meta’s valuation faster than it has changed Wall Street’s earnings forecasts.
At about 22x NTM normalized earnings, Meta trades close to its three-year average multiple of roughly 23x. The notable change is how quickly investors have re-rated the stock from its 2026 lows.
Meta Enterprise Platform gives the company a path to turn Muse and its broader AI stack into a commercial business. But after the re-rating, the next evidence investors need should come from the financials.
If Muse drives analysts to raise Meta’s revenue and EPS forecasts, the recent multiple expansion would have stronger fundamental support. If estimates remain largely unchanged while the valuation climbs, investors would increasingly be paying today for profits that Wall Street has not yet put into its models.
For Meta investors, EPS estimate revisions are now the clearest scoreboard for whether Muse can grow into the valuation the market has already begun giving it.
So what is Meta stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Meta could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
