Meta launches two offerings totaling about $35 billion as AI spending accelerates
Key Facts
Meta said on October 26 that it was launching two concurrent stock offerings totaling about $35 billion, as it expands investment in AI infrastructure and in developing what Mark Zuckerberg described as “personal superintelligence for everyone.” The transaction includes Class A common stock and depositary shares representing shares of mandatory convertible preferred stock, Series A. The company said proceeds from the preferred stock offering, together with the future settlement of prepaid forward sale agreements, would be used for general corporate purposes. It does not expect to receive initial proceeds from the sale of Class A shares through purchasers in the prepaid forward sale agreements. That detail puts the timing of part of the financing at the center of the deal structure, as spending pressures available cash.
The company has not agreed to or finalized arrangements for the program, and said there is no guarantee it will be established. In the current offering, Nvidia, AMD and Broadcom expressed interest in purchasing up to $5 billion in Class A shares in total. Meta said these indications are non-binding and do not represent purchase commitments. This separates the two current offerings, totaling about $35 billion, from the potential sale program, which remains uncertain.
The deal comes as cash investment costs have risen: capital expenditures, including payments of principal on finance lease obligations, totaled $34.91 billion in the third quarter of 2026. Cash provided by operating activities was $32.79 billion in the same period, while free cash flow was negative $2.12 billion. In its results, the company narrowed its 2026 capital expenditure forecast to a range of $135 billion to $145 billion, from a previous range of $130 billion to $145 billion. It raised the lower end of its forecast while leaving the upper end unchanged. The revision follows a quarter in which capital expenditures exceeded operating cash flow and free cash flow turned negative.
By contrast, Meta said cash, cash equivalents and marketable securities totaled $82.45 billion on September 30, 2026. Third-quarter revenue was $64.601 billion, up 26% from $51.242 billion in the same period a year earlier. The results show revenue growth alongside an expanding investment base, while free cash flow came under pressure during the quarter. Zuckerberg said the company had achieved “important milestones this quarter toward delivering personal superintelligence for everyone,” citing the launch of “Muse” and “Muse Wonder,” which he described as the company’s first frontier model. Meta’s announcement added that “Muse” surpassed 10 million users in the United States and Canada in its first weeks, with shopping its leading use case.
The company forecast fourth-quarter 2026 revenue of $73 billion to $76 billion, assuming foreign exchange rates would be a headwind of about 1% to year-over-year revenue growth. After Meta reported third-quarter results on October 21, its shares rose 0.5% in regular trading and gained 2.9% in after-hours trading. Following the offering announcement on October 26, the stock rose more than 1% in premarket trading, according to Reuters. Meta shares closed at $642.62 on October 23, compared with $516.79 for AMD and $210.96 for Nvidia. These indicators capture the market’s reaction first to the results and then to the financing plan, while the proposed additional sale program remains undecided.