As Nasdaq Marks Bull Symbolism for 2026, Top Money Managers Double Down on AI Giants

The Nasdaq Composite recently entered fresh territory with the start of a new bull market cycle. Historically, this index has generated an impressive 31% average annual return during such periods since 1990—a powerful reminder that today’s market environment carries substantial wealth-building potential heading into 2026 and beyond.

What’s particularly noteworthy is where the smartest institutional capital is flowing. Multiple prominent hedge fund managers placed aggressive bets during the third quarter on two technology powerhouses: Meta Platforms and Alphabet. Their conviction speaks volumes about where they see the most compelling opportunities.

The AI Advantage Reshaping Digital Advertising

Meta Platforms operates a social media empire reaching billions of users monthly across Facebook, Instagram, and Threads. This unparalleled reach, combined with the company’s custom-built AI infrastructure, has created a competitive moat that’s difficult to replicate.

The transformation is already visible in user behavior. During the latest earnings period, CEO Mark Zuckerberg disclosed that AI-powered recommendation engines drove measurable improvements: Facebook engagement climbed 5%, Threads usage surged 10%, and Instagram video interaction jumped 30%. These aren’t coincidental improvements—they reflect the direct impact of sophisticated language models and proprietary chip technology refined specifically for content ranking.

On the financial side, Meta’s third-quarter revenue grew 26% to $51 billion, with earnings per share rising 20% to $7.25. The ad-tech sector itself is projected to expand at 14% annually through 2030, providing robust tailwinds for the company’s growth trajectory. Despite the stock trading 15% below its all-time peak, current valuations at 30 times forward earnings remain reasonable for a business expected to grow 17% annually.

Alphabet’s Cloud and Search Dominance Through AI

Alphabet faces a different challenge—generative AI tools have disrupted traditional search in ways the company must actively counter. The response has been decisive. Google rolled out AI Overviews and AI Mode to integrate intelligence directly into search results, while launching AI Max—a suite of tools that automate ad creation, copy optimization, and user targeting for brands.

Google Cloud, the company’s infrastructure division, holds third place in the cloud market and gained 2 percentage points of share recently, primarily due to its recognized expertise in large language models and AI infrastructure. Industry research suggests organic search traffic may decline 50% by 2028, yet Alphabet should maintain its position as the dominant force in digital advertising due to its technology portfolio and scale.

Third-quarter financials reinforced confidence in the narrative. Revenue accelerated to $102 billion (up 16%), while earnings jumped 35% to $2.87 per share—a beat on both fronts. The CFO emphasized robust demand for AI infrastructure, particularly custom processors and Gemini models.

Where the Billionaires Are Positioning

The movement of institutional capital validates the thesis. Stanley Druckenmiller accumulated 76,100 Meta shares and 102,200 Alphabet shares, now representing 2% of portfolio allocations. Israel Englander’s Millennium Management holds these positions far more substantially—793,500 Meta shares and 2.2 million Alphabet shares rank as his eighth and fifth-largest holdings. Ken Griffin directed $1.4 million Meta shares to Citadel’s portfolio, making it his fourth-largest position, alongside 2.5 million Alphabet shares.

These concentrated bets from some of Wall Street’s most disciplined capital allocators suggest institutional confidence in both companies’ ability to monetize AI innovation at scale.

The Verdict for 2026

Alphabet shares have already appreciated 70% year-to-date, compressing valuation appeal somewhat. However, 32 times forward earnings remains justified for a company expected to grow earnings 16% annually. A measured entry position deserves consideration.

Meta, trading at 30 times earnings with expectations for 17% annual growth, presents a more compelling entry point given its underperformance relative to recent highs. The bull market symbolism moving into next year—combined with accelerating AI monetization across its advertising and platform divisions—suggests selective buying is warranted for patient investors.