Meta Could Charge $199.99 a Month for Its AI Agent. Here Are 2 Ways It Can Make More Money Than Subscriptions

Meta Platforms (META) is about to put its enormous AI spending to the test. The company is preparing to launch a consumer AI agent, known internally as Hatch. The agent can act on its own inside apps like Instagram and WhatsApp. It is built to handle real tasks, like booking a restaurant, comparing prices, filling out forms, and shopping. Reports suggest it could arrive within weeks, possibly at a premium price of up to $199.99 a month. A more powerful model, codenamed Watermelon, is expected in October. 

The stakes are high because the spending has been huge. Meta has guided 2026 capital expenditure to between $130 billion and $145 billion. That bill is already showing up in the numbers. Last quarter, free cash flow collapsed to $784 million, from $8.55 billion a year earlier. The stock is down roughly 13% this year, and investors want proof the money is building something real. 

Where the Real Money Would Come From

Most people will focus on one question. Will users pay up to $199.99 a month for Hatch? That is the wrong thing to focus on. Meta makes more than 97% of its money from ads. So even if the subscription sells well, that income would be tiny next to what Meta earns from advertising. The real benefit is different. When an agent shops, books, and plans things for you, it could learn a lot about you. If Meta can use those insights to improve ad targeting, it strengthens the business that already drives almost all its revenue. Strengthening the core ad business, even a little, could dwarf whatever the subscription brings in. 

There is a second opportunity too. Meta is building a shopping agent for Instagram that can find products and complete purchases in the app. This is a direct move against TikTok Shop. If it works, Meta earns a cut of sales, which could bring in far more than subscriptions ever would. 

So the subscription price will get the attention, but I believe the payoff for Meta lies in stronger ad targeting and a new way to sell products. That is the part worth watching once Hatch goes live.

About Meta Platforms Stock

Meta Platforms is a global technology company that develops products and platforms that help people connect and communicate with their friends and family. The company operates through the Family of Apps (FoA) and Reality Labs (RL) segments. Its product portfolio includes Instagram, Facebook, WhatsApp, Threads, Meta AI, Messenger, AI-powered smart glasses, and others. 

Over the past year, Meta has significantly underperformed the S&P 500 ($SPX). The broader index posted gains of around 20% while the stock fell about 19% during the same period. That created a performance gap of more than 40 percentage points. Both dropped sharply around March 2026 during broader market volatility, but the S&P 500 recovered while Meta struggled to return to its earlier level. 

Meta’s valuation looks reasonable, even cheap, by its own standards. The forward GAAP P/E of 18.25x sits about 18% below its 5-year average of 22.13x. Similarly, the forward Price-to-sales ratio of 5.74x also sits 14% below its 5-year average of 6.64x. So the stock is trading at a discount to its historical average. That reflects how nervous investors have become about the heavy AI spending. The EPS outlook explains part of that caution. 

Analysts expect modest growth of 5% in 2026 as the capex weighs on earnings. It then increases to 12% in 2027 and 17% in 2028, which assumes the AI bet starts to pay off. The balance sheet also keeps deteriorating due to the aggressive spending. Meta used to be net cash positive for a long time. When I covered the company six weeks ago, it had turned to a net debt of $5.59 billion. It now holds $90 billion in cash against $112 billion in debt, leaving it with net debt of $22 billion. For investors, the debate is whether the discounted stock is an opportunity. The investment concerns are real. But if products like Hatch show the spending is working, the current stock could look like a bargain in hindsight.

Meta Posts Strong Revenue Growth Despite Earnings Miss

The company reported its second-quarter fiscal 2026 earnings on July 29. During the quarter, total revenue reached $60.8 billion, representing a 28% year-over-year increase. Family of Apps remained the main driver of the business, generating $60.4 billion in revenue. On a GAAP basis, earnings came in at $6.18, missing consensus estimates by $1.04. Total expenses rose 55% year over year to $42 billion, including $2.4 billion in legal-related charges and $1.2 billion in severance costs tied to the May 2026 headcount reduction. 

Meta projects third-quarter revenue to range from $61 billion to $64 billion. On the expenses side, full-year 2026 total expenses are forecasted in a range between $165 billion and $169 billion. 

What Are Analysts Saying About Meta Platforms Stock

Bank of America Securities reaffirmed its Buy rating and kept its price target at $810 on August 31. Rosenblatt Securities also stayed positive, marginally increasing its price target from $883 to $886 while maintaining a Buy rating.

According to 55 Wall Street analysts covering the stock, it enjoys a consensus Strong Buy rating. Their median price target of $751.08 offers a further 31% upside from the current share price. In addition, the highest price target of $1,000 implies an impressive 75% upside from here. 

On the date of publication, Jabran Kundi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.