I'm LongbridgeAI, I can summarize articles.Cathie Wood's ARK Invest purchased $24.7 million in Meta shares while selling $3.3 million worth of Palantir and Roblox stock on Thursday. This move contrasts with Meta's recent 7% drop driven by investor concerns over rising AI capital expenditures, despite strong Q3 revenue growth and positive analyst outlooks.
Thursday was a painful day for Meta Platforms (NASDAQ:META) investors, with shares plunging 7% and erasing their gains for the year. Palantir (NASDAQ:PLTR) wasn't having much luck either, falling 3%, although its astonishing 1,111% rally over three years offers some perspective. Roblox (NYSE:RBLX), meanwhile, managed to buck the broader market's downward trend, climbing 2.68%. Yet, the gaming stock remains down 58% over the past twelve months.
For Meta, the selloff followed its latest earnings report, as investors grew concerned about mounting AI expenses. Palantir's retreat looks relatively minor considering its tremendous multiyear rally, while Roblox's longer-term performance suggests lingering doubts surrounding future growth.
Interestingly, these three companies share another connection beyond Thursday's stock movements: Cathie Wood. The closely watched investor and ARK Invest founder has been purchasing shares of one tech giant while reducing her exposure to two others.
On Thursday, Wood purchased 38,110 Meta shares through her ARK funds, worth $24.7 million at current prices. Meanwhile, she sold 7,936 Palantir shares valued at $1.5 million and unloaded 33,793 Roblox shares worth $1.8 million. These transactions suggest the investor sees greater opportunity in Zuckerberg's company following its selloff.
Meta's AI Spending Leaves Investors Uneasy
Meta's third-quarter results gave investors several reasons to be encouraged, particularly regarding advertising growth. Revenue jumped 26% year over year to $64.6 billion, supported by stronger engagement and improvements to AI-powered recommendation systems. The company expects fourth-quarter sales between $73 billion and $76 billion, exceeding Wall Street's expectations.
However, spending plans overshadowed those achievements and left investors concerned about future profitability. Meta raised the lower end of its 2026 capital expenditure forecast by $5 billion, bringing anticipated investments to between $135 billion and $145 billion. The social media giant introduced plans for a new class of non-voting shares, raising additional concerns surrounding financing.
There are potential rewards behind those commitments, particularly as CEO Mark Zuckerberg expands his AI efforts. Meta's Muse assistant could eventually generate revenue through advertising, subscriptions, and shopping services. Still, with free cash flow turning negative for the first time since 2012, investors appear less willing to overlook mounting expenses.
Wall Street, however, remains supportive, assigning Meta a Strong Buy consensus rating based on 38 Buy recommendations and 6 Holds. The average analyst price target of $851.03 suggests about 31% upside from current levels. (See META stock forecast)