Meta Moves to Raise Up to $95 Billion as AI Spending Outpaces Cash Flow

Meta Platforms said Monday it is launching two concurrent stock offerings worth a combined $35 billion and has laid groundwork for a further $60 billion share sale next year, as the social media company moves to shore up financing for its artificial intelligence buildout just five days after reporting that spending had outrun its cash generation for the first time in years.

The offerings, detailed in a filing submitted to the Securities and Exchange Commission on October 26, consist of roughly $22.5 billion of Class A common stock sold through forward sale agreements, plus roughly $12.5 billion in depositary shares representing a newly created series of mandatory convertible preferred stock. Together with a roughly $60 billion at-the-market program the company plans to launch once a new class of non-voting shares begins trading, Meta is positioning to raise close to $95 billion in fresh capital.

A Two-Part Deal, With Chipmakers at the Table

The depositary shares, each representing a 1/20th interest in a share of the preferred stock, carry an expected $1,000-per-share liquidation preference and are set to convert automatically into common stock around August 2029. Meta intends to list them on the Nasdaq Global Select Market under the ticker "METAM," according to the preliminary prospectus supplement for that offering. The dividend rate and conversion terms will not be fixed until pricing.

The common stock piece is structured as a sale through forward agreements with Morgan Stanley Capital Services and Goldman Sachs, meaning Meta will not receive proceeds from the shares sold by the banks' forward purchasers until settlement, which can occur any time up to November 2027, according to the corresponding prospectus supplement filed with regulators. Underwriters on both pieces have 30-day options to sell additional shares to cover over-allotment.

In an unusual twist, chipmakers Nvidia, Advanced Micro Devices and Broadcom — all major suppliers to Meta's data centers — have told underwriters they are each interested in buying a share of up to $5 billion of the common stock offering on the same terms as other investors, the SEC filing shows. Their participation is non-binding and comes as scrutiny grows across Wall Street over the web of circular financing arrangements tying AI chip suppliers to the hyperscale buyers that are also now becoming their investors.

Cash Flow Turned Negative Last Quarter

The timing follows Meta's third-quarter earnings, released October 21, in which the company disclosed that capital expenditures of $34.9 billion exceeded the $32.8 billion in cash its operations generated during the quarter, pushing free cash flow to negative $2.1 billion, according to figures reported in Meta's quarterly report filed with the SEC. Revenue for the quarter was $64.6 billion, up 26% from a year earlier, and net income was $9.86 billion — though operating income fell 37% because of a roughly $9.9 billion legal settlement tied to teen mental-health litigation.

Despite that charge, Meta narrowed its full-year 2026 capital spending guidance to a range of $135 billion to $145 billion and said fourth-quarter revenue should come in between $73 billion and $76 billion. Meta had told investors in an earlier notice on its investor relations site that it would report results after the close on October 21, with the earnings release and financial tables posted there under the company's standard disclosure practice.

Monday's offerings mark the first time this year that a Financial Times report from June — which said Meta was weighing a large stock sale to fund AI infrastructure and which the company at the time dismissed as "pure speculation" — has translated into an actual filed transaction. The move follows Alphabet's roughly $85 billion equity raise earlier in 2026, which investors had treated as a template for how heavily capitalized tech companies might fund AI data-center buildouts without relying solely on debt.

Dilution Risk and Who Is Affected

Meta's own filings spell out the trade-off. The company warned that settling the forward sale agreements through share delivery "will result in dilution to our earnings per share and return on equity," and that issuing new shares tied to the mandatory convertible preferred stock "may dilute" existing shareholders and "could depress" the stock price. Meta's Class A shares last changed hands at $642.62 on October 23, the reference price used in the forward-sale calculations in the SEC filing.

• Existing Meta shareholders face potential earnings-per-share dilution once the forward sale agreements settle and the preferred stock converts.
• Nvidia, AMD and Broadcom stand to become equity holders in a major customer, deepening financial ties already built on chip-supply contracts.
• Morgan Stanley Capital Services, Goldman Sachs and the broader underwriting syndicate earn fees on what ranks among the largest tech equity financings on record.
• Meta's AI infrastructure division — including its Louisiana and other hyperscale data-center projects — is the ultimate destination for the proceeds, which the company says will go toward "general corporate purposes."

Market commentary circulating Monday tied the roughly $95 billion combined figure to the same reasoning: heavy AI infrastructure spending across the technology sector has fueled a stock rally even as it raises questions about valuations and rising leverage. One Monday market review circulated to brokerage clients flagged Meta's filing alongside broader AI-related trading activity, noting the involvement of Nvidia, AMD and Broadcom as prospective buyers.

What Happens Next

Pricing terms for both the preferred stock's dividend rate and the common stock's final offering price had not been set as of Monday; both prospectus supplements remain marked "subject to completion." The depositary shares are expected to begin trading on Nasdaq once pricing is finalized, while settlement of the forward sale agreements on the common stock piece can be deferred by Meta for more than a year, giving the company flexibility on when dilution actually hits its share count.

The $60 billion at-the-market program disclosed alongside the two underwritten offerings will not launch until Meta's previously announced Class C non-voting common stock begins trading, which the company has tied to around January 2027. Meta has cautioned that it has not yet entered into any agreement for that program and that its size, timing and terms remain undetermined — meaning the $95 billion figure represents a ceiling on the company's near-term fundraising intentions rather than a completed transaction.