These stocks are un-a-Mused

Mark Zuckerberg will probably be grinning ear to ear during Meta’s annual Connect conference today, and it’s easy to see why: His Muse AI assistant has surpassed ChatGPT downloads to claim the top spot on the App Store, Meta’s shares have soared more than 30% since the beginning of the month, and Zuck’s the focus of a new Aaron Sorkin movie coming next month.

Okay, he may not be thrilled about that last one, but it’s unlikely to dampen Zuckerberg’s spirits. After years of Wall Street bemoaning Meta’s massive AI spending spree (around $241 billion over the last three years) and fretting that there’s nothing to show for it, Meta’s finally got a smash hit on its hands.

Customer service, beware

Users love Muse’s ability to take the reins of their digital lives, including booking appointments, making purchases, and writing emails. Companies are sprinting to get on board: Over the last three days, PayPal, Shopify, Instacart, and Expedia have all announced partnerships with Meta that will allow them to integrate their platforms with Muse.

But not everybody is thrilled. Goldman Sachs just released a list of companies that benefit from “consumer inertia,” which is a fancy way of saying “laziness.” Analysts warn that industries with high switching costs, recurring bills, or those that make cancelling their services annoyingly difficult will suffer as agents streamline customers’ ability to shop for alternatives.

In other words, AI is willing to sit on the phone with customer service for hours just to save you a few bucks on your bill, even if you’re not—and that’s bad news for telecom carriers, home or auto insurers, and utility companies. Streaming services, travel agencies, and even financial services could all take a beating from AI agents happy to jump ship to the competition.

Perhaps the biggest loser from the debut of AI agents: Planet Fitness. The gym chain is notorious for making life miserable for customers trying to get out of their membership, but shares are down 18% over the last five days as investors realize that AI removes the headache that keeps customers locked in.

A world without transactional friction

Muse is great news for Meta shareholders who have been waiting for the company to finally have something to show for all its AI investments. And if you’re a PayPal or Shopify shareholder, the tech giant has already provided a boost this week, as investors anticipate the benefits of frictionless AI shopping.

But the companies that depend on that friction seem set for some serious upheaval—and according to Citrini Research, investors should think long and hard about whether those business models will be able to endure this new phase of AI disruption. “Tactics that worked when consumer behavior was dictated by human psychology will fall by the wayside,” the firm wrote on X. “And those that fail to adapt will be left behind.”—MR