Meta and Alphabet Buck a Nervous Wall Street as Investors Reward AI Products That People Actually Use

On a day when rising bond yields weighed on much of Wall Street, two of the world's largest technology companies moved the other way.

Shares of Meta Platforms rose 4.48% to $777.45 on Thursday, September 24, while Alphabet, Google's parent company, gained 1.34% to $342.36, according to Trading Economics. The gains came as the broader market struggled: the S&P 500 and Nasdaq finished little changed, while the Dow Jones Industrial Average fell 162 points.

Meta's advance extended its rally this week to about 16%, following a surge of more than 11% on Monday, September 21. Alphabet's shares are up about 39% so far this year.

A difficult backdrop

The strength in Meta and Alphabet stood out against a difficult macroeconomic environment. The US 10-year Treasury yield rose above 5.15% during the week, its highest level since 2007, while the 30-year yield hit its highest since 2004. Brent crude traded near $107 a barrel amid tensions between the United States and Iran over the Strait of Hormuz.

Higher yields typically weigh on technology stocks, because they reduce the present value of future earnings. That Meta and Alphabet rose regardless suggests that investors were responding to company-specific news rather than broader market conditions.

Other large technology stocks were mixed. Microsoft fell about 0.5% and Amazon was flat, while Oracle fell sharply after reports that it had sent a force majeure notice on a major AI data centre project in New Mexico.

What is driving Meta

Meta's rally has been fuelled by growing investor enthusiasm for its AI products.

On Monday, Wells Fargo raised its price target on Meta by $156, from $640 to $796, according to TipRanks. Analyst Ken Gawrelski, who maintained a Buy rating, said Meta's recent AI product launches were "finally giving the company a stronger story to support its AI strategy".

A key part of that story is Muse, Meta's new personal AI assistant. Muse reached the top position on Apple's US App Store shortly after its launch, a sign of strong early consumer adoption. Muse is designed as a personal agent that can provide hands-free help with tasks and voice assistance.

For much of the past two years, investors have questioned whether Meta's enormous spending on AI infrastructure would translate into products that consumers use. Muse's rapid rise in the app charts has been read as an early answer.

Meta Connect: glasses as the AI interface

Meta's annual Connect conference, which began on September 23, added further momentum. At the event, the company unveiled a new generation of smart glasses, which it sees as a key way for people to interact with AI.

The Ray-Ban Meta Gen 3 glasses, priced at $449, feature a 12-megapixel camera, 3K video recording, a six-microphone array and a customisable action button, with up to nine hours of battery life, according to iTechPost. Meta also introduced Ray-Ban Meta Audio, a camera-free model priced at $349 focused on music, podcasts and hands-free AI interaction, which begins shipping on October 13.

The company announced new features for its Meta Ray-Ban Display glasses, including cycling and transit navigation and expansion to European markets, Canada and the United Kingdom. It also previewed Meta VR Glasses, priced at $1,299 and due in spring 2027.

Meta said it expects to offer more than 100 AI glasses styles across Ray-Ban, Oakley and Meta-branded glasses by the end of 2026.

Trading Economics attributed Meta's Thursday gain to the positive reception for its AI agent software and gadget releases.

Alphabet's steady climb

Alphabet's gain was more modest but continued a strong year for the company. Its shares have risen about 39% year to date, reflecting investor confidence in its position across search, cloud computing, YouTube and AI.

Google DeepMind's next major model, Gemini 4, has entered an early post-training phase and is expected to ship before the end of the year, according to TechStartups. Google also announced new AI-powered features, including custom YouTube feeds that users can create through text prompts, and expanded reporting in Search Console to track traffic from multimodal search tools such as Google Lens and Circle to Search.

AI hyperscalers rebounded on Thursday after losses earlier in the week, according to Trading Economics.

The bigger picture: AI winners and losers

The divergence among technology stocks this week illustrates how investors are becoming more selective about AI.

Companies that can show AI products gaining real traction with users, or AI driving revenue growth, are being rewarded. Companies facing questions about the cost and execution of their AI infrastructure build-outs are being punished. Oracle's fall after its force majeure notice on its New Mexico data centre was a clear example of the latter.

This selectivity marks a shift from earlier phases of the AI boom, when almost any company associated with AI enjoyed strong gains. With bond yields high and the cost of capital rising, investors are demanding clearer evidence of returns.

What it means for investors

Several questions will shape how Meta and Alphabet perform in the months ahead.

For Meta, the key question is whether early enthusiasm for Muse and its smart glasses translates into sustained engagement and, eventually, revenue. Meta's core business remains advertising, and investors will watch whether AI improves ad targeting, engagement and monetisation across Facebook, Instagram and WhatsApp.

For Alphabet, attention will focus on whether Gemini 4 can strengthen its competitive position against rival AI models, and how AI is changing search behaviour and advertising.

Valuations are also a consideration. After Meta's strong rally, the stock is trading close to analysts' average price target — about $764 as of Monday, according to TipRanks — leaving less room for further upside unless expectations rise.

Relevance for India

For Indian investors, many of whom now invest in US technology stocks through international funds and direct investment platforms, the performance of Meta and Alphabet matters directly. India is also one of the largest user markets for both companies, with hundreds of millions of people using WhatsApp, Instagram, Facebook, YouTube and Google services.

As both companies roll out AI assistants and new devices, India's vast user base will be an important testing ground and growth market — and one where the question of whether people actually use AI products will be answered at enormous scale.