Cathie Wood’s Ark Investment Management LLC is making headlines as it cuts its stake in Meta Platforms Inc., marking the first sale in nearly a year amidst a broader downturn in major tech stocks. Wood's flagship fund, the Ark Innovation ETF, sold 12,595 shares of Meta on March 17, 2025, followed by an additional 2,160 shares on March 18. This marks a significant move for an investor known for her aggressive bets on disruptive technologies and innovation.
As of December 31, 2024, Ark funds held more than 460,000 shares in the parent company of Facebook. Up until this month, Wood had been accumulating shares, making this recent divestment notable. The sell-off comes as Meta’s stock has suffered a significant drop, reflecting a broader trend affecting the so-called Magnificent Seven tech stocks, which had previously spurred massive rallies in the US equity markets but have recently lost momentum.
According to data from Bloomberg, Wood's Ark Innovation ETF has seen mixed performance, gaining 68% in 2023 but experiencing a decline of 15% year-to-date in 2025. This decline is nearly double that of the Nasdaq 100 Index, signalling broader challenges in maintaining growth amid rising interest rates and inflation fears. As for Meta, the stock has turned negative for the year, becoming the last of the Magnificent Seven to do so. Looking deeper into market trends, investors are unloading their Meta shares amid fears of U.S. tariffs on tech companies and increasing competition from Chinese AI firms.
The latest financial data reveals a significant downturn for Meta, which was trading at $581.83 per share on March 19, 2025, reflecting an 18.8% decline over the previous month. Today’s trading showed a daily high of $582.93 and a low of $581.45, indicating a volatile environment for this tech giant. Notably, this decline marks a significant retreat from its 52-week high of $740.91, raising questions among investors about its future trajectory.
Adding to the concern is Meta’s recent earnings report, which, despite showing earnings per share (EPS) at $8.02 for Q4 2024, projected a disappointing EPS of $5.25 for Q1 2025. This prediction has clouded investor confidence, particularly as advertising revenue—a major revenue stream—appears to be slowing against a backdrop of economic uncertainty. Meta's failure to provide a stronger growth outlook has heightened worries about its revenue sustainability, causing even more volatility in its stock valuation.
The ongoing push into artificial intelligence, spearheaded by CEO Mark Zuckerberg, has led to mixed reactions across the market. Meta’s AI initiatives, including the Llama models and AI chatbot, have celebrated over a billion downloads but have also led to rising operational costs, projected between $60 to $65 billion in 2025 alone. The company’s ambitious goal of serving over a billion users through its AI by the end of the year presents both a huge opportunity and a significant financial risk amid growing market uncertainties.
Analysts from KeyBanc Capital Markets recently downgraded their price target for Meta from $750 to $710, emphasizing the increasing macro uncertainty surrounding the stock. As part of its strategy, the company has increased fixed costs while still working to adapt its infrastructure to remain competitive against rivals like Microsoft and newer AI entrants.
A persistent issue for Meta is the cost associated with its Metaverse projects, particularly Reality Labs, which reported a staggering $13.7 billion in losses in 2022. The vision of a vibrant virtual world intended to enhance user engagement has not translated to reality, driving frustration among investors who prefer immediate returns over lengthy and costly innovations.
The broader tech market is in turmoil. The Nasdaq Composite has also taken a significant hit, down 7.3% year-to-date and 12% from its peak. The Bloomberg Magnificent 7 Total Return Index—a benchmark for the largest U.S. tech stocks, including Meta—has reported a 16% drop in 2025. This overall market correction is amplifying the challenges Meta faces, especially when considering investor profit-taking strategies amid looming recession fears.
In terms of technical analysis, the recent drop of around 20% in Meta’s stock price indicates a possible “healthy” correction following a long uptrend. Current trading support levels show the price should stabilize around $582, though if it dips further below this threshold, a decline toward psychological price points, such as $500, could occur, further complicating market confidence.
Despite current challenges, some analysts remain cautiously optimistic about Meta’s long-term potential. Consensus price targets hover around $714 to $738, signalling a possible upside of 23-27% from current levels. However, given recent trends and uncertainty, they stress that buyers should remain vigilant.
Moreover, competition from TikTok and Snapchat for advertising share and user engagement is a lingering threat. Investors are also on edge regarding an upcoming Federal Trade Commission (FTC) trial slated for April 14, 2025, which could force Meta to divest popular platforms like Instagram and WhatsApp due to antitrust concerns.
The blend of rapid technological innovation, heavy capital investment, and fluctuating market conditions places Meta Platforms Inc. at a crossroads. The ongoing sell-off, including Cathie Wood’s recent fund movements, showcases investor anxieties about the company's future as significant headwinds mount. As the tech giant navigates its path, investors will be watching closely: can Meta recover its footing and rise back to prominence in the sector, or is this the beginning of a more significant decline?
