Cathie Wood quietly cut nearly $8 million worth of Meta Platforms (META) stock, selling tens of thousands of shares across ARK Invest’s ETFs days before the company’s Jan. 28 earnings report.
Clearly, Meta Platforms has been one of the market’s strongest tech performers over the years, riding optimism around AI-related spending, cost discipline, and advertising recovery.
For some color, the stock has returned roughly 370% to investors, beating the broader market.
However, last year was relatively muted, with the stock returning just 6%, trailing the S&P 500’s 14% gain over the same period.
Though Meta’s core business continued to hum impressively, the dual narratives of an aggressive AI infrastructure buildout and crippling Reality Labs losses complicated the picture.
Looking ahead to its upcoming earnings, I expect the swing factor to remain unchanged, as investors will be keenly following management’s commentary on next year’s expenses and the AI capex trajectory.
Wood’s move, though, doesn’t come as a surprise.
The ARK Invest boss is known for actively trading and rebalancing in response, specifically ahead of earnings when a stock gets overbought, or volatility risk rises.
Still, when Wood trims exposure just ahead of a high-stakes earnings report, it highlights how pivotal the quarter is and how little room there may be for any hiccups.
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Broadcom: Wood bought 49,048 shares worth roughly $15.96 million across ARKK and ARKW, showing her conviction in Broadcom’s AI and data-center exposure as a long-term winner in the AI space.
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Coinbase: ARK bought 42,179 shares valued at roughly $9.41 million through ARKK and ARKF.
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Circle: Wood added 129,446 shares worth about $9.24 million.
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Bullish: ARK purchased 88,533 shares, investing around $3.23 million.
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WeRide: Through ARKQ, Wood bought 180,740 shares worth $1.64 million.
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Meta Platforms: ARK trimmed 12,400 shares valued at about $8.03 million.
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10x Genomics: 31,507 shares worth roughly $7.31 million.
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Kratos Defense (KTOS): A smaller trim of 1,591 shares, totaling about $181,000.
Meta’s fundamentals continue to impress, which is perhaps why investors still give it leeway on its aggressive AI spending.
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Its powerful core advertising business helped post $51.2 billion in total sales in Q3, with its Family of Apps segment generating a whopping $24.97 billion in operating income during the quarter.
By contrast, its Reality Labs segment delivered an operating loss of $4.43 billion.
Reality Labs has long been a thorn in the company’s side, with a long-duration hardware and metaverse effort that’s still consuming billions with no near-term payoff.
To limit bleeding, Meta reportedly plans to slash nearly 10% of Reality Labs staff, a division comprising 15,000 employees. Moreover, the San Francisco Chronicle reported that Meta would cut over 270 Reality Labs jobs in California, as it looks to tighten things up.
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The big question mark with Meta, though, is its capex problem, which continues to grow with every passing quarter.
Despite the uncertainty, CEO Mark Zuckerberg feels it’s the right strategy to take the company ahead.
For perspective, in its Q3 report, the company bumped its 2025 capex outlook to $70 billion–$72 billion while guiding full-year expenses to fall in the $116 billion–$118 billion range.
However, Meta’s management also signaled that 2026 capex dollar growth will be “notably larger, warning investors that the buildout will likely accelerate before the payoff will show up.
Despite the stock’s recent wobbles, Wall Street remains mostly bullish on its prospects.
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Consensus estimates point to a superb 24% upside from current price levels, with the average price target at an impressive $833.54.
Moreover, based on Meta stock’s current price of $674.69, here are the price targets assigned by other analysts.
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Redburn Atlantic: upgraded to Buy, raised PT to $900 (from $740): +33.4%.
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Jefferies: reiterated Buy, PT $910:+34.9%.
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KeyBanc: kept Overweight, cut PT to $835 (from $875):+23.8%.
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UBS: kept Buy, cut PT to $830 (from $915):+23.0%.
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Bank of America: reiterated Buy, maintained PT of $ 810 (+20.1 %).
BofA’s call in particular stands out.
The big bank believes in Meta’s ability to efficiently pair durable ad fundamentals with AI-driven upside, despite the exponential increase in capex.
It also cites robust macro conditions, backed by strong user growth across Meta’s powerful platforms, along with improved AI-powered ad targeting as critical drivers of potential sales upside.
Crucially, BofA also believes that investor anxiety over 2026 expenses is largely priced in, and if Meta can demonstrate that AI investments are translating into stronger ad performance, it could light a fire under its stock.
For Q4, Wall Street is looking for $58.41 billion in sales and EPS of $8.19 (normalized) and $8.20 (GAAP).
Moreover, it’s important to note that analyst sentiment has been mostly constructive over the past 90 days, with 28 EPS estimates revised higher and 13 revised lower.
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This story was originally published by TheStreet on Jan 26, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.