Size is a relative matter. The standard Manhattan apartment would seem almost claustrophobic compared to the vast expanses offered by suburban living. A similar dynamic is playing out in the market.
Mega-cap companies are generally defined as those with market capitalizations exceeding $200 billion. Of course, the largest companies are another order of magnitude larger than that. For example, Meta, which reported stellar earnings this week, has a current market capitalization of $1.65 trillion.
But concerns about its AI buildout expenses wiped $135 billion from its market cap in just four sessions, or put another way, roughly the value on and entire Uber. Market cap is one way to understand how big these companies are, but another is by examining the size of their operations, and their opportunities.
Meta's personal AI agent is designed to be more of an active digital assistant than a conventional conversational chatbot. Muse can open browsers, fill out forms, send emails, schedule appointments, book travel, and (potentially) even make purchases.
If Muse is worth $120/year and reaches just 1% of Meta's Daily Active People, that's $4.3 billion/year. If it's worth half that amount, but reaches 20% of their daily actives, that's $43.2 billion/year. The first number seems absurdly low as a back-of-the-napkin figure, but the $135 billion valuation loss in less than a week is offset by $20 billion in revenue (the company trades at just under 7x revenue). If Muse can generate $30 billion in revenues, it is a megacap company in its own right!