Cathie Wood, CEO of ARK Investment Management. AFP/Yonhap News
Cathie Wood, chief executive of ARK Invest, has sold off Alphabet shares and raised the firm’s holdings in Meta Platforms, in a move read as a bet on Meta’s expanding artificial intelligence business.
Selling Alphabet, Buying Meta: Wood’s Choice
According to Barchart, ARK Invest recently bought 43,091 Meta shares for $27.9 million, or about 37.5 billion won. The purchases were made through the ARK Innovation ETF (ARKK) and the ARK Next Generation Internet ETF (ARKW).
Over the same period, the firm unloaded 84,392 Alphabet shares worth roughly $27.8 million, or about 37.4 billion won. In effect, ARK shifted the proceeds from its Alphabet stake into Meta.
The timing of Wood’s bet has also drawn attention. Meta closed up 2.71% at $665.60, bringing its gain to 8.5% over the past five trading sessions and 10.9% over three months. Even after that steep run-up, Wood is seen as anticipating further upside.
Behind the recent share gains is Meta’s push into AI. On the 8th, the company unveiled Muse, a personal AI assistant designed for everyday tasks. Developed by Meta Superintelligence Labs (MSL), the service supports scheduling, drafting electronic documents and monitoring home security cameras.
Muse is offered on a free tier as well as paid subscriptions at $20 and $100 a month. Investors are watching whether Meta, long dependent on advertising, can turn AI into a new revenue stream.
Meta Boosts AI Spending; Wall Street Upbeat Despite Margin Concerns
Whether that AI spending translates into actual profit remains uncertain. Meta’s second-quarter revenue rose 28% from a year earlier to $60.8 billion, or about 81.81 trillion won, beating market forecasts of $60.21 billion.
Total costs, however, jumped 55% to $42.03 billion, or about 56.56 trillion won, and the operating margin narrowed to 31% from 43% a year earlier. Earnings per share came in at $6.18, short of the $7.10 analysts had expected.
Wall Street remains favorable nonetheless. Of the 55 analysts covering Meta, 46 rate it a strong buy and two a buy. The average price target is $754.61, about 17.1% above the current share price.
J.P. Morgan raised its rating on Meta to overweight from neutral, and lifted its price target to $820 from $640.
In a report, Doug Anmuth, senior analyst at J.P. Morgan, said Meta has transformed from a pure digital advertising company into a front-runner in consumer autonomous agents and next-generation frontier models.
Anmuth said Meta has entered the early stages of rolling out frontier models and AI-based products beyond advertising, adding that the Muse agent app and the opening of API access to Meta’s models have the potential to drive the stock significantly higher.