Meta launches two offerings totaling about $35 billion to fund AI expansion
Key Facts
Meta announced on October 26 the launch of two concurrent public offerings totaling about $35 billion to fund its expansion of AI infrastructure. One includes Class A common shares sold through forward sale agreements, while the other comprises depositary shares representing mandatorily convertible Class A preferred shares. The company said in its filing that it does not expect to receive initial proceeds from the sale of common shares by the forward sellers. Meta will receive the net proceeds when those agreements are settled and intends to use them for general corporate purposes. This means the total offering figure does not represent the full amount of cash the company will receive immediately.
The potential financing program extends beyond the two current offerings: Meta said it plans to sell about $60 billion of Class C shares in the market after they begin trading. The company had not entered into an agreement for the program or set its timing or terms, according to its filing. The possibility adds another financing channel to its infrastructure spending plan, but remains contingent on arrangements that have not been finalized. Meanwhile, Nvidia, AMD and Broadcom each expressed nonbinding interest in buying Class A shares worth up to a combined $5 billion. The same prices and terms that apply to other buyers will apply to these shares, according to the filing submitted to the U.S. Securities and Exchange Commission.
Meta is turning to equity markets at a time when it has substantial operating resources and cash. Net cash from operating activities totaled $96.873 billion in the nine months ended September 30, 2026, compared with $79.586 billion in the same period a year earlier. Cash, cash equivalents and marketable securities totaled $82.45 billion at the end of September. Those assets were $857 million higher than their level on December 31, 2025. The figures provide context for the scale of financing the company is seeking as it expands investment, without eliminating its reliance on debt and equity markets to fund its plans.
Advertising accounts for much of the operating performance underpinning the expansion: ad impressions across Meta's apps rose 10% year over year in the third quarter of 2026. Average ad prices increased 14% in the same period compared with the third quarter of the previous year, according to the company's filing. Meanwhile, chipmakers' interest in buying Meta shares drew criticism over what is known as circular financing, according to Associated Press coverage. The debate links chip and infrastructure suppliers with a company that is among the largest buyers of those technologies. Investors also remained concerned about the rising cost of borrowing to build data centers and buy AI chips, which contributed to volatility in sector stocks, the news agency reported.
In market reaction on Monday, October 26, Meta shares fell more than 2% at the start of trading, then turned higher before returning to a 1.9% loss during the session, according to the Associated Press. The stock closed at $630.56, compared with a close of $642.62 on October 23, according to EL7 data. The 1.9% figure reflects one stage of the session's volatility, while the closing price shows the stock's level at the end of trading. The moves came amid investor sensitivity to the cost of financing AI expansion and the expected return on spending on data centers and chips. A single day's move alone does not amount to a verdict on the market's assessment of the financing plan, but reflects trading volatility that day.
Investors are also focused on Meta's fourth-quarter outlook, with the company setting a revenue range of $73 billion to $76 billion. The average analyst estimate cited by the Associated Press is $73.65 billion, while the midpoint of the company's range is above that average. Alphabet and Microsoft were scheduled to report quarterly results on Wednesday, with Amazon due to report on Thursday, according to the news agency. Those results could provide further indications of the returns technology companies are generating from their AI spending. This comes as markets track whether growth in Meta's advertising business can keep pace with its infrastructure expansion.