Meta reverses losses to rise as investors weigh $35 billion AI funding plan

Meta Platforms shares rose 1% after falling as much as 4% earlier in the session, reversing an initial selloff following the company’s launch of roughly $35 billion in equity offerings to help fund its AI infrastructure buildout. Meta also outlined plans for a separate $60 billion nonvoting share offering in 2027.

The current offerings comprise $22.5 billion in Class A common stock through forward sale agreements and approximately $12.5 billion in mandatory convertible preferred stock. Meta intends to use the proceeds for general corporate purposes, including AI infrastructure investment, according to StreetInsider.

Nvidia, Advanced Micro Devices and Broadcom have expressed non-binding interest in purchasing up to $5 billion in aggregate of the Class A shares, at the same price and on the same terms as other investors.

Morgan Stanley and Goldman Sachs are leading the offerings. Meta also expects to grant underwriters a 30-day option to purchase additional securities, including up to $3.375 billion in additional Class A stock.

The fundraising comes as Meta forecasts capital expenditures of $135 billion to $145 billion for 2026, reflecting the enormous cost of building out the computing capacity needed to develop and deploy AI models and services.

Meta generated $97 billion in operating cash flow during the first nine months of 2026 and held about $82 billion in cash, cash equivalents and marketable securities at the end of September. However, free cash flow turned negative in the third quarter as capital spending increased.

The company also outlined plans for a separate, approximately $60 billion at-the-market offering of Class C nonvoting shares, expected to begin in the first quarter of 2027. Meta has not yet entered into an agreement for that program.

The preferred shares in the current offering are expected to convert automatically into Class A or Class C common stock around Aug. 15, 2029. Meta intends to seek a Nasdaq listing for the depositary shares under the ticker METAM.

The capital-raising plans highlight how the AI investment race is changing financing decisions even for highly profitable technology companies. Meta’s advertising business generates substantial cash, but its rising infrastructure commitments are increasing the need for additional funding options.

The planned nonvoting share issuance would also allow Meta to raise equity while preserving the voting control of CEO Mark Zuckerberg and other existing voting shareholders. Investors must weigh the potential long-term returns from AI against the costs and possible dilution associated with financing the expansion.