Druckenmiller and Loeb Exit Broadcom, Buy Alphabet

Meta Platforms is drawing bullish analyst attention as its stock trades near $648 despite record quarterly revenue, with a $900 price target implying roughly 39% upside. Second-quarter revenue reached $60.8 billion, up 28% year over year, at a 31% operating margin, and the stock trades at a forward price-to-earnings ratio of 19, below the S&P 500's approximately 22 times forward earnings. Morgan Stanley analyst Brian Nowak maintains a $775 price target and projects Meta's AI pipeline could lift earnings per share by more than $10, a roughly 34% increase over 2025 adjusted EPS of $29.68, after the company settled youth social media addiction lawsuits for up to $18 billion over a decade. The bull case faces headwinds from capital expenditures of $31.1 billion in the second quarter, up 82% year over year, full-year 2026 capex guidance of $130 billion to $145 billion, and a Reality Labs loss of $4.62 billion, which compressed free cash flow to $784 million from $8.55 billion a year earlier. Meta guided third-quarter revenue to $61 billion to $64 billion, and its Connect 2026 event on Sept. 23 plus third-quarter earnings in late October will test whether the AI spending is translating into new revenue.

Anthropic's initial public offering, expected no earlier than mid-October, will test how hungry the financial markets still are for exposure to artificial intelligence, with backers seeking a valuation of $2 trillion or more that would top Space Exploration Technologies as the biggest IPO ever. Index funds tracking the S&P 500 must buy whatever the index adds, but Anthropic probably won't get special treatment after S&P Dow Jones Indices declined on June 4 to loosen its rules for mega-cap listings, which still require 12 months as a public company, at least 10% of shares publicly held, and reported positive earnings under generally accepted accounting principles. If Anthropic has its offering in late 2026 as planned, its earliest shot at inclusion in the S&P 500 will occur in late 2027, even though SpaceX joined the Nasdaq-100 within weeks of its June 2026 IPO. Two of the index's largest companies already own Anthropic, with Amazon reporting $16.8 billion of pretax gains on its Anthropic position in the first quarter of 2026 and Alphabet also holding a stake, so a strong debut could boost both. Per finance professor Jay Ritter at the University of Florida, across 9,343 U.S. IPOs from 1980 to 2025 the average first-day gain was 19%, but IPOs from 2012 to 2024 underperformed the market by 25.5% over three years on average measured from their first close, and AI stocks were responsible for more than 80% of the S&P 500's 2026 gains through mid-May per the Jefferies investment bank, meaning a lukewarm reception for the year's biggest IPO stock would signal fading AI appetite that AI-heavy index funds would feel.