Cathie Wood Just Bought META Stock. Should You?
Indirectly, Meta Platforms (NASDAQ:META) stock could be a way for investors to get exposure to artificial intelligence (AI) technology. Plus, a well-known fund manager is reportedly taking long positions in Meta Platforms. With these considerations in mind, you might want to add a few Meta Platforms shares to your own portfolio.
Frankly, I’ve been wary of Meta Platforms in June. The company’s costly metaverse investments don’t seem to have benefited Meta Platforms’ bottom line yet. Furthermore, the company has encountered regulatory issues in multiple countries.
Yet, there are reasons to add Meta Platforms to your watchlist and possibly make a small investment in this tech titan. So, let’s now reveal which famous financial celebrity decided to add a stake or two in Meta Platforms.
Cathie Wood’s Funds Go Long on META Stock
As reported by Bloomberg, two funds managed by Cathie Wood, who heads ARK Investment Management, recently purchased META stock. Apparently, this is the first time Wood’s funds have added shares of Meta Platforms since 2021, when the company was still called Facebook and wasn’t all-in on the metaverse yet.
Here are the details. The ARK Innovation ETF (NYSEARCA:ARKK) reportedly bought 150,459 shares of Meta Platforms, while the ARK Next Generation Internet ETF (NYSEARCA:ARKW) purchased 24,389 Meta Platforms shares.
Unfortunately, there’s no way to know exactly why Wood’s funds added those META stock shares. This won’t stop analysts from offering their opinions, though.
For example, Todd Sohn, ETF strategist at Strategas, posited, “Post-job cuts, they must find the stock attractive again.” That’s certainly a consideration that Wood might have in mind. Or, she may be intrigued by Meta Platforms’ relatively affordable virtual reality (VR) headset, as well as the company’s in-development app that’s meant to compete with Twitter.
Meta Platforms Embraces Generative AI
Another factor that might catch Wood’s attention is Meta Platforms’ explorations of machine-learning technology. In one example, Meta Platforms recently released a “human-like” AI model, which, per Reuters, Meta claims is able to “analyze and complete unfinished images more accurately than existing models.”
In addition, Barron’s reported that Meta Platforms intends to add generative AI functionalities to its apps, including Instagram and Facebook. Moreover, Reuters stated that Meta Platforms has unveiled a “series of AI tools it was building.” These include “ChatGPT-like chatbots planned for Messenger and WhatsApp that could converse using different personas.”
Last year, probably very few investors thought of Meta Platforms as a leader in the machine-learning market. Today, Meta Platforms is clearly preparing to make waves in AI, including generative AI. This could push META stock higher in 2023 and 2024, so it’s not a terrible idea to own a few shares.
It’s Fine To Be Cautiously Optimistic About META Stock
For the reasons cited at the beginning of this article, I’m still cautious about Meta Platforms as an investable business. I’d like to see if the public really embraces the metaverse and VR headsets before I can feel strongly bullish about the company.
At the same time, I’m not 100% against owning a few shares of META stock. Some of Wood’s funds are adding to their stakes in Meta Platforms, and the company is taking AI technology seriously. So, today could be a good day to consider a small investment in Meta Platforms.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
