Meta's $14.3B AI bet on Muse Spark faces investor skepticism over monetization as stock trails 12 months
Meta's stock has fallen 18% over the past 12 months, the worst performer among megacaps alongside Microsoft, despite 33% first-quarter revenue growth. The underperformance reflects investor demands for proof that the company can monetize its $14.3 billion investment in Alexandr Wang's team and the newly launched Muse Spark AI model beyond its core 98%-dependent advertising business.
Meta's stock has declined 18% over the past 12 months, making it the worst performer among megacap tech companies alongside Microsoft, despite reporting 33% revenue growth in the first quarter — the fastest expansion rate for any period since 2021. The underperformance reflects investor skepticism over whether CEO Mark Zuckerberg can monetize the company's $14.3 billion acquisition of roughly half of Scale AI in June 2025, which brought founder Alexandr Wang and his top engineers to lead a new Meta Superintelligence Labs division.
Wang's team delivered the Muse Spark AI model in April, marking Meta's first proprietary foundation model after the company's open-source Llama 4 release in April 2024 failed to gain traction with developers. The strategic shift followed two months of internal review after Llama 4 fell flat. Muse Spark was designed to integrate directly into Meta's apps including Facebook, Instagram, and Ray-Ban Meta glasses, rather than targeting third-party developers. Meta has since launched new AI and business subscription plans, but still derives 98% of revenue from advertising.
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