Key Highlights
- Meta unveiled a $35 billion stock offering and outlined a potential $60 billion share sale program scheduled for 2027.
- Major chipmakers Nvidia, AMD, and Broadcom signaled potential purchases totaling $5 billion in Meta shares.
- Revenue for the third quarter jumped 26% year-over-year to $64.6 billion, though free cash flow shifted into negative territory.
- Piper Sandler kept its $850 price target on Meta, while Bank of America held steady with an $845 valuation.
- Shares climbed back from morning declines, yet investors continue scrutinizing escalating AI infrastructure expenditures.
Meta Platforms saw its share price oscillate Monday following the disclosure of a $35 billion stock sale aimed at financing artificial intelligence initiatives. The stock declined nearly 2% during early trading hours before recovering to slight gains by late morning, extending movement from the previous week’s downturn.
Social Media Giant Launches Dual Stock Sale Strategy
The technology company intends to issue $22.5 billion worth of Class A common stock alongside $12.5 billion in instruments tied to convertible preferred shares. Management stated the capital raised will support general corporate needs, with a primary focus on artificial intelligence expansion efforts.
A second fundraising initiative targeting up to $60 billion will commence after Meta’s new nonvoting Class C shares start trading in early 2027. The company emphasized this program remains under development, and final proceeds may differ from the maximum amount.
Semiconductor manufacturers Nvidia, AMD, and Broadcom have indicated willingness to acquire up to $5 billion of Class A stock collectively. Their potential participation aligns with Meta’s aggressive buildout of data center infrastructure and computing resources.
Strong Revenue Growth Accompanies Surging Infrastructure Investment
Meta delivered third-quarter revenue of $64.6 billion, marking a 26% increase compared to the prior-year period. A report on Meta’s earnings highlighted robust advertising performance and the introduction of new Muse AI capabilities.
The social media giant posted earnings of $3.83 per share according to generally accepted accounting principles. Adjusting for a $9.89 billion legal settlement expense, earnings would have totaled $7.40 per share. Management projected fourth-quarter revenue between $73 billion and $76 billion.
Meta established its 2026 annual capital expenditure outlook at $135 billion to $145 billion. Third-quarter spending reached $34.91 billion, while free cash flow registered negative $2.12 billion, a reversal from positive cash generation in the corresponding quarter last year.
Wall Street Weighs Financing Strategy and Investment Returns
Other technology firms are similarly expanding computational infrastructure. Applied Digital’s Texas data center agreement includes a 51% ownership position in a proposed 50-megawatt facility, demonstrating ongoing sector-wide investment momentum.
Piper Sandler analyst Thomas Champion noted Meta’s capital-raising approach may alleviate concerns about funding availability. His team preserved an Overweight rating alongside an $850 per-share valuation. Bank of America continues recommending the stock with a Buy rating and an $845 price objective.
Separately, Hyperscale Data’s Michigan AI project anticipates beginning operations in December. This buildout underscores the industry-wide competition for computing power, while Meta shareholders weigh escalating infrastructure expenses. Shares currently trade below pre-earnings levels.
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