Meta launches offering of about $35 billion as chipmakers consider buying $5 billion in shares
Key Facts
Meta launched two public offerings on October 26 with a combined value of about $35 billion to fund its expansion in artificial intelligence, Reuters reported. NVIDIA, AMD and Broadcom expressed non-binding interest in buying up to a combined $5 billion of Class A shares. The companies said they could buy the shares at the same price and on the same terms applicable to other buyers. The interest remains preliminary, as each company could buy a smaller amount or no shares at all. The transaction comes as Meta raised the lower end of its 2026 capital spending forecast, while continuing to invest in AI infrastructure.
The current offering comprises about $22.5 billion of Class A common shares through forward sale agreements, and about $12.5 billion of mandatory convertible preferred shares. The transaction therefore combines an issuance of common shares with securities that must convert into shares, rather than being a single common-share offering as stated in the initial version of the report. Meta said proceeds from the two offerings are for general corporate purposes, while the financing plan supports its investments in AI infrastructure. The three interested companies will participate on the same terms as other investors, and their announcement does not include an agreement on a new strategic partnership. Meta's announcement about them was limited to non-binding interest in buying Class A shares.
The timing reflects Meta's rising financing needs as it increases spending on data centers and the capabilities required to run AI services. In July, the company estimated its 2026 capital spending at between $130 billion and $145 billion, before raising the lower end to $135 billion in October while keeping the upper end at $145 billion. The revision came as revenue posted strong growth in the third quarter, according to data reported by the Associated Press. Revenue was $64.60 billion from July to September, up 26% from $51.24 billion in the third quarter of 2025. The quarter's total also exceeded analysts' forecast of $63.34 billion, putting the heavy spending in the context of a company growing sales while expanding its investments.
Before that, Meta's revenue in the second quarter of 2026 was about $60.80 billion, up 28% year over year from $47.52 billion in the same period of 2025, according to the Associated Press. The comparison between the two quarters shows revenue continued to rise year over year, although the reported growth rate for the third quarter was lower than that of the second quarter. Meanwhile, the company revised its annual capital spending forecast higher at the lower end, putting the scale and timing of the financing under investor scrutiny. The AP reported that Meta expects fourth-quarter 2026 revenue of between $73 billion and $76 billion. The midpoint of that range exceeds analysts' forecast of $73.65 billion, the agency said.
The stock moved amid these concerns after the results were announced. Meta shares ended Thursday's session, October 22, down 7%, Axios reported, noting that the higher lower end of the capital spending forecast and the lack of a 2027 revenue forecast had raised investor concerns about financing the AI expansion. On October 26, the shares rose about 1% after falling as much as 4% earlier in the session, as the market assessed the financing plan of about $35 billion, according to Investing.com. Meta shares closed at $642.62 and NVIDIA shares at $210.96 on October 23, according to EL7 data. The subsequent session's movement reflects investors' fluctuating assessment of the financing plan after the stock fell following the results.
Alongside the current offering, Meta disclosed plans for a separate offering program of about $60 billion in non-voting Class C shares, which is expected to begin in the first quarter of 2027, according to Investing.com. The company has not yet entered into an agreement for this program, so it remains separate from the current financing. This timeline puts the possibility of an additional share issuance among the company's plans for next year, while the current transaction uses common shares and mandatory convertible preferred shares. The three chipmakers' interest in the current offering also does not change its announced terms or establish their commitment to participate. Attention will remain on the execution of the current offering, followed by the expected start of the Class C program in early 2027.