Meta launches offering of about $35 billion to fund AI expansion
Key Facts
Meta launched a public offering of common stock and convertible preferred stock worth about $35 billion on October 26, according to a Reuters report. The company says the financing will support its AI expansion, while its capital plan reflects growing infrastructure needs for that expansion. The offering follows the company’s increase to its expected capital spending range for the current year, including original payments for finance leases. Meta set that spending at between $135 billion and $145 billion, compared with the previous range of $130 billion to $145 billion. The company said its AI investments are already generating additional advertising revenue by boosting engagement, improving recommendations and increasing monetization efficiency.
Meta’s third-quarter revenue exceeded $64.60 billion, up 26% from $51.24 billion in the same period a year earlier, according to The Associated Press. Revenue also topped analysts’ estimates of $63.34 billion. The results give the company a growing source of funding for its investments, while its account indicates that AI tools have begun supporting its advertising business. Mark Zuckerberg said the company made progress during the quarter toward developing personal superintelligence, including the launch of Muse and Muse Wonder, its first two flagship models. The average number of daily active users across Meta’s family of apps reached 3.64 billion in September, up 3% year over year.
Alongside its quarterly results, Meta raised its fourth-quarter revenue forecast to between $73 billion and $76 billion, according to its results filing with the U.S. Securities and Exchange Commission. The company did not provide a full revenue forecast for 2027, but said it expects strong growth to continue that year. The Associated Press also reported that Meta did not provide spending or revenue forecasts for 2027. The company expects losses in its Reality Labs unit to fall to about $15 billion next year as it shifts investment to other areas, particularly AI, the AP said. This leaves the company’s revenue and spending outlook for next year without a disclosed annual range, while providing a specific indication of the unit’s loss trajectory.
In the market, Meta shares closed at $642.62 on October 23, according to EL7 data. The company’s shares had closed up 0.5% in regular trading on October 21, then rose 2.9% in after-hours trading following the results announcement, according to The Associated Press. The latter move relates to the results announcement session and does not represent a direct response to the offering announced later. The current move combines financing through common and convertible preferred stock with elevated capital spending plans. The company’s fourth-quarter 2026 outlook and its indication that revenue growth will continue in 2027 remain the main time frames disclosed in its filing.