TLA

By Britney Nguyen

Meta is looking to raise a total of $95 billion through stock-related deals that stretch into early next year

Meta announced a $35 billion equity offering on Monday.

Meta Platforms intends to raise nearly $100 billion through various stock offerings in the coming months, the company said on Monday.

Most immediately, the Facebook parent company (META) is planning an offering of $35 billion in common stock and preferred stock that will support its investments into artificial intelligence, it said in a news release.

Nvidia (NVDA), Advanced Micro Devices (AMD) and Broadcom (AVGO) have expressed interest in purchasing up to $5 billion in aggregate through this offering, Meta added.

The social-media giant also plans to launch an at-the-market program of up to $60 billion, which will be tied to the launch of its new Class C shares. Meta created that nonvoting class of stock to help it raise money. The shares are expected to debut in the first quarter of next year.

Meta said the offering will go toward "AI infrastructure and personal superintelligence." The company noted that its investments in these technologies "are already generating tangible returns" by increasing engagement with its products and improving advertising and monetization.

Meta recently said it expects capital expenditures of about $135 billion to $145 billion this year, referring to money put toward assets that are meant to benefit the business over the long term.

William Blair analyst Ralph Schackart said the $95 billion financing plan reflects "the substantial capital needed to succeed in the AI race" and to afford the infrastructure build-out.

The offerings "significantly expand Meta's funding flexibility" in addition to its operating cash flow and debt, he said in a note to clients.

Investors will likely continue to be wary of Meta's financing and the potential for it to raise more money in the future, Schackart said. But he and his team "believe that Meta will ultimately produce a profitable AI business and its returns longer term should help the company diversify, although the path may not be linear."

Meta's stock fell 1.9% on Monday.

That Nvidia, AMD and Broadcom are looking to support Meta's equity offering "is not surprising," said Ryan Lee, senior vice president of product and strategy at ETF provider Direxion. That's because the semiconductor makers need major cloud-services providers like Meta to continue spending on chips and other AI infrastructure.

Overall, the AI trade has reached a point where the level of capital needed to fund the build-out is not widely available, Lee said.

While computing power has been a constraint for AI companies, funding is also becoming a scarce resource for hyperscalers, as "there's only so many people and companies and entities that are able to provide this level of liquidity," Lee noted. That means Meta is having to compete with other AI-model builders not only for chips, but for the money to secure that hardware.

Bob Lang, founder of options-trading service Explosive Options, took a similar view that the chip companies "have a vested interest" in making sure their biggest customers can raise the funds needed to continue buying their products "without hitting the wall on spending."

And following SpaceX's (SPCX) earnings report earlier this month, investors got a taste for AI-driven earnings and that "high margins actually do exist," he told MarketWatch in emailed comments, referring to profitability.

However, Lang said it's not clear how much longer the debt market will be welcoming to the massive amounts of money Meta and its AI peers need to continue funding the AI build-out.

Going forward, it will be important to understand how the relationships between the companies who purchase products and services from each other affect reported revenue and earnings, Devon Coombs, teaching professor of finance at Santa Clara University's Leavey School of Business, told MarketWatch.

As cash flows swell and "become increasingly interconnected, investors need to understand how much reported revenue represents independent customer demand versus spending supported by investments from companies participating in the same ecosystem," he said in emailed comments.

While Meta's equity offering looks like a reasonable way for the company to manage its massive investments into AI, Coombs said it will be important for investors to pay attention to the economics of the interconnected AI relationships, how sustainable revenue growth is "and whether the industry's collective investment assumptions are reasonable."

-Britney Nguyen

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10-26-26 1745ET