Why Cathie Wood Keeps Loading Up on Meta
ARK Investment Management made three separate bets on Meta in September, selling rival AI giants to fund each purchase, even as Meta's expenses outpaced its revenue and a new competitor threatened its biggest growth story.
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Cathie Wood’s ARK Investment Management spent September adding to Meta (NASDAQ:META | META Price Prediction) in three separate purchases. Meta fell 4.79% on September 28, 2026.
Meta trades at $715.62, below the $761 consensus target. The stock had climbed 23.89% over the past month before the drop, so ARK was buying into strength.
Meta is growing revenue faster than almost any company its size, but it is spending heavily on AI infrastructure. Free cash flow nearly disappeared last quarter.
Either ARK is early, or the market is correctly repricing a company whose growth now costs more than it earns. The answer depends on cash flow figures Meta has not reported yet, and on whether its new AI products start producing revenue.
ARK Sold Other AI Names to Fund Its Meta Buying
ARK’s Innovation and Next Generation Internet funds bought 43,091 Meta shares worth about $28.1 million on September 9, 2026, while selling Alphabet (NASDAQ:GOOGL).
ARK Investment Management added 10,997 shares worth $7.1 million on September 14. On September 21, ARK’s three funds bought 51,477 shares while selling CrowdStrike (NASDAQ:CRWD).
Selling one large-cap AI name to buy another reflects a relative call about which company gets more of the same trend.
ARK Investment Management bought about $28.7 million of Meta on April 30, 2026, after the stock fell 8.55% on first-quarter earnings.
Meta’s Agent Launch Lined Up With Every Purchase
The September buying came alongside Meta’s push into AI agents. Its new agent product launched mid-month and quickly climbed the productivity app rankings.
Wells Fargo raised its Meta price target to $796 from $640 after the launch. A company reaching 3.6 billion daily users and shipping a work-focused product with immediate adoption has the upside scenario.
Mark Zuckerberg said more than 1 million businesses were already using Meta’s business agents weekly and called personal agents “an extremely important and massive market.”
He also spoke on the topic. He said, “there will continue to be a significantly higher margin on selling intelligence rather than selling compute directly.” If that holds, agents are where the infrastructure spending pays back.
Why Meta Fell Anyway on September 28
The drop followed reports that a rival AI lab is building a competing always-on assistant, alongside a broader repricing of software names the same day. Coverage tied the move to concerns about AI spending.
Meta is entering a new business before it has revenue from it, and serious competition lowers what investors will pay for that future revenue while building costs remain.
Meta is up 8.68% year to date, while the S&P 500 has gained 12.27%. Over one year, Meta has lost 3.47%.
Meta’s Spending Guidance Keeps Moving Higher
With fourth-quarter 2025 results, Meta guided 2026 expenses to $162 billion to $169 billion. With first-quarter results, Meta raised capex guidance to $125 billion to $145 billion.
In July, the floors rose again, to $130 billion to $145 billion for capex and $165 billion to $169 billion for expenses. That much capex has to land somewhere. That is why 24/7 Wall St. featured seven of the power, cooling, and networking suppliers behind the AI expansion in a free report.
Meta reported second-quarter revenue of $60.8 billion, up 28%, while expenses rose 55%. Meta’s earnings per share fell 13% to $6.18.
Should You Buy or Sell META Stock
At about 22 times forward earnings, you pay a modest multiple for a company whose ad revenue grew 27% last quarter. The core business can carry the build-out.
Management said second-quarter operating income would have risen 9% excluding legal charges and severance.
The gap to the $761 consensus looks like an opportunity, although analyst targets, including Wells Fargo’s, are one input and carry no guarantee.
Two things would falsify this call: third-quarter free cash flow staying near second-quarter levels without agent revenue, or capex guidance rising above $145 billion. Either would mean the market is right to price in lower returns on invested capital.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
