Cathie Wood bought $14.3 million of Meta Platforms NASDAQ:META after its post-earnings selloff, making a contrarian bet that the social-media giant's advertising strength can eventually offset rapidly rising artificial-intelligence costs. The purchase suggests ARK (ARK) Invest views the nearly 8% decline as an opportunity, even as investors question when Meta's massive infrastructure buildout will produce adequate returns.

ARK's exchange-traded funds purchased 26,509 Meta shares through multiple portfolios, according to the firm's daily disclosures. The move increased exposure after Meta shares extended their 2026 decline to roughly 18%.

Meta's second-quarter revenue rose 28% to $60.8 billion, narrowly exceeding expectations, as advertising revenue increased 27% to $59.36 billion. Ad impressions climbed 14%, while average price per ad rose 12%, showing that Meta's core business remains resilient despite the market's negative reaction.

The earnings picture was less encouraging. Diluted earnings fell 13% to $6.18 per share, missing expectations, while operating income declined 8% to $18.78 billion. Total costs and expenses surged 55% to $42.03 billion, including $2.4 billion of legal charges and $1.18 billion of severance expenses. Operating margin narrowed to 31% from 43%.

Meta also raised the lower end of its 2026 capital-spending outlook to $130 billion, maintaining an upper limit of $145 billion. Quarterly free cash flow collapsed to $784 million from $8.55 billion a year earlier as capital expenditures reached $31.08 billion.

Investor Takeaway

Wood is betting that Meta's 3.60 billion daily users and powerful advertising engine can finance the AI buildout without permanently damaging profitability. Investors should watch ad-pricing growth, operating margin, and free-cash-flow recovery rather than treating the ARK purchase itself as a catalyst.

Meta expects third-quarter revenue of $61 billion to $64 billion and full-year expenses of $165 billion to $169 billion. Continued revenue growth above 20% would strengthen Wood's dip-buying case, but further margin compression, legal losses, or another increase in infrastructure spending could prolong the stock's weakness.