Funds Reallocate $3 B from Meta to Alphabet on 20% Ad Revenue Surge
Major asset managers trimmed Meta stake by 2.5 percentage points in June, reallocating roughly $3 billion into Alphabet shares. Analysts point to Alphabet’s 20% year-over-year ad revenue growth and expanding AI-driven cloud services as the primary catalysts for the rotation.
1. Fund Rotation Dynamics
In June, several leading mutual funds and hedge funds reduced their median Meta allocation by 2.5 percentage points, freeing up about $3 billion of capital. That capital was redeployed into Alphabet shares, lifting Google’s weighting in these portfolios to an average of 6% by month-end.
2. Drivers Behind the Shift
Fund managers cite Alphabet’s 20% year-over-year gain in search and YouTube ad revenue, combined with robust AI service rollouts in its cloud division, as key reasons for reallocating assets. The company’s 18x forward P/E is now viewed as more attractive than Meta’s 22x, given Alphabet’s diversified revenue streams and AI growth prospects.
