Cathie Wood-led ARK Invest made a notable rotation within its technology portfolio, buying the Facebook parent while reducing its position in Alphabet.
ARK Invest purchased 38,304 Meta shares through its ARKK ETF, worth about $24.8 million, according to the firm’s website.
It also bought another 4,787 shares through its ARKW ETF, valued at about $3.1 million.
At the same time, the investment firm sold 72,803 Alphabet shares worth roughly $24 million through ARKK and another 11,589 shares valued at about $3.8 million through ARKW.
The transactions effectively saw ARK buy about $27.9 million of Meta stock while selling approximately $27.8 million of Alphabet shares.
The move comes as Meta shares climbed to a two-month high on Wednesday, buoyed by the launch of its Muse AI assistant and the acquisition of Swedish AI firm Stilla.ai, which is expected to strengthen the company’s push into AI-powered business agents.
Meta gains momentum with Muse launch
Meta shares closed about 7% higher Wednesday after the company introduced Muse, a personal artificial intelligence agent designed to work on behalf of consumers.
The product was launched through Meta Superintelligence Labs and is powered by the Muse Spark 1.3 foundation model.
Meta said Muse is designed to help users perform tasks such as booking trips, shopping and responding to emails.
The company’s Muse agent, known internally as Hatch, is central to CEO Mark Zuckerberg’s ambition to deliver “personal superintelligence” to the billions of people who use Meta’s platforms.
The strategy also represents an effort to diversify Meta’s revenue beyond advertising while creating a business that can eventually generate returns from the company’s enormous AI infrastructure investments.
Meta expects its spending on AI chips and other infrastructure to exceed $130 billion this year.
Equity analysts have broadly viewed Muse as the beginning of a potentially significant product cycle, although they remain cautious about how quickly the new technology can translate into financial returns.
Mizuho Securities analyst Lloyd Walmsley said investors have been waiting for evidence that Meta’s huge infrastructure spending can produce tangible returns, describing Muse as “a significant step in that direction.”
Walmsley also highlighted the product’s polish, broad functionality and free entry price.
KeyBanc analysts maintained a $780 price target and argued that the market continues to “underestimate Meta’s AI positioning and product cycle.”
Meta has a distribution advantage
Morgan Stanley’s Brian Nowak said success in the emerging AI-agent market will depend on two key ingredients: broad distribution and access to rich consumer datasets.
Meta already has both through Facebook, Instagram, WhatsApp and Messenger.
The company’s massive user base could therefore give Muse an advantage over standalone AI startups attempting to acquire users from scratch.
Meta is also introducing privacy features such as the dedicated Muse Secure VM, while offering the service at no upfront cost to consumers.
Still, Wall Street is unlikely to immediately assign a large valuation premium to the new AI business.
Meta’s previous initiatives, including Facebook Shopping and the metaverse, failed to live up to some of the lofty expectations initially attached to them.
Investors are therefore likely to demand evidence of user adoption and engagement before assuming that Muse can materially contribute to earnings.
“As with other Meta apps, we view engagement as the initial barometer of success, with monetization following over time,” KeyBanc’s Justin Patterson said.
Nowak similarly described Muse as one of the largest unpriced call options on Meta’s long-term earnings, while cautioning that investors will need clearer evidence of adoption and monetizable user behaviour.
Alphabet faces AI spending questions
ARK’s decision to reduce Alphabet exposure comes as the Google parent has struggled to convince investors that its enormous AI spending will generate sufficiently strong returns.
Alphabet shares have lost about 8% over the past month and remain roughly 18% below their May peak.
The decline has come even as the Nasdaq Composite, where Alphabet is a major component, remains close to its record high.
A central concern is the amount Alphabet is spending on AI infrastructure.
The company raised its 2026 capital expenditure forecast to between $195 billion and $205 billion during its second-quarter earnings call.
Investors have also become increasingly concerned about talent departures.
Alphabet, however, has begun September with a renewed push to strengthen its AI position.
The company launched Gemini 3.8 Flash last week, its third Flash model in six weeks, alongside a cybersecurity model aimed at government and enterprise customers.
Google Cloud could provide the clearest route to monetising that infrastructure spending.
Wolfe Research expects Google Cloud Platform revenue to grow 125% year over year in the third quarter, compared with the Street consensus of 87%.
If achieved, that level of growth could make Cloud an increasingly important contributor to Alphabet’s earnings.
Alphabet’s proprietary tensor processing units could provide another source of upside.
Citizens JMP expects TPU sales to reach about $3 billion in 2026 before rising sharply to $25 billion in 2027.
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