Cathie Wood Buys Meta, Sells Alphabet. Is She Buying High and Selling Low?

Cathie Wood, the renowned investor behind ARK Invest, recently made a notable stock move by purchasing $27.9 million in Meta (META) shares while simultaneously selling $27.8 million worth of Alphabet (GOOG) shares. This was an interesting turn of events, as the trade comes at a time when Meta's stock has surged 10% over the past week, while Google's stock has fallen 8% over the past month. The question arises: is Wood buying high and selling low?

The story behind this trade is deeply rooted in the recent performance of both companies. Meta Platforms (META) has been experiencing a significant rebound, climbing 14% over the past three months. However, the company's earnings per share (EPS) missed estimates by $1.04, mainly due to a 55% surge in costs and a dramatic drop in free cash flow from $8.6 billion to $784 million.

On the other hand, Alphabet (GOOG) has been on a downward trend, trading at a price-to-earnings (P/E) ratio of 17 compared to Meta's 23. Interestingly, Google Cloud exhibited impressive growth with an 82% increase in revenue year-over-year, yet Alphabet didn't make it into the list of 10 best stocks to buy at the moment.

When examining the fundamentals, the case for META seems to rest on advertising strength. In Q2 2026, the company reported a revenue of $60.80 billion, up 27.96% year-over-year, with advertising revenue alone contributing $59.36 billion, a 27% increase. Despite these impressive numbers, diluted EPS came in at $6.18, missing the $7.22 estimate.

Moreover, total costs rose by 55% to $42.03 billion, compressing the operating margin to 31% from 43%, and free cash flow fell to $784 million from $8.55 billion a year earlier. Analysts have projected that Meta's price target stands at $754.15, with a trailing P/E of 23 and a forward P/E of 18.

Alphabet, on the other hand, presents a different story. Q2 2026 revenue for GOOG was $119.80 billion, up 24.23% year-over-year, with EPS of $9.11, beating analysts' expectations by a long shot. Google Cloud's growth was nothing short of remarkable, soaring to 82% year-over-year, thanks to its impressive user base and API token processing. With a P/E ratio of 17 and a forward P/E of 18, GOOG is currently trading at a lower valuation compared to META.

So, is Cathie Wood buying high and selling low? After evaluating the recent performance of both companies and their respective fundamentals, it is difficult to definitively answer this question. Investors should closely monitor Meta's Q3 revenue figures, Reality Labs losses, and Google Cloud's growth pace into Q3 to determine whether this investment move will vindicate or invert.