After Prophet Muhammed’s mother gave birth to Prophet Muhammed (peace be upon him), she sent a messenger to Prophet Muhammed’s grandfather, Abdul-Muttalib, giving him the good news of his grandson.
When the messenger reached Abdul-Muttalib and told him the good news, Abdul-Muttalib was glad and happily went to the baby to carry his grandchild in his own hands. He brought the baby to the Kaaba to bless him, and then entered the Kaaba itself and supplicated and thanked Allah.
And he called him Muhammed. This name was not well-known among the Arabs at the time, but Allah inspired his grandfather to call him this name. Prophet Muhammed’s grandfather was asked about P’s name. The people asked him, “Oh Abdul-Muttalib, what have you called your son who we are honoured to met?” He replied, “I called him Muhammed.”
They asked, “Why did you call him this name instead of other more familiar names?” Abdul-Muttalib replied, “I wanted Allah to praise him in the heavens, and His creation to praise him on the earth.”
And this is what happened to him. People praised him for all his noble character traits as well as his fine physical features. He is praised in this world for the knowledge and wisdom he brought that guided and benefitted the people, and he will be praised and honoured in the next life by being allowed to intercede for others in front of Allah