Meta Launches $35 Billion Stock Offering to Fund AI Expansion

Meta Platforms launched public offerings of approximately $35 billion in common stock and convertible preferred stock on Monday, October 26, as the company seeks additional capital for its artificial-intelligence expansion. The Facebook and Instagram parent also said it plans to introduce a separate at-the-market share-sale program of up to $60 billion after its new non-voting Class C shares begin trading, expected in the first quarter of 2027. The fundraising follows last week’s third-quarter earnings report, in which Meta raised the lower end of its 2026 capital-expenditure guidance to a range of $135 billion to $145 billion and announced the creation of the new Class C share class. The company has committed to roughly $825 billion in future spending, primarily for data centers, AI-related infrastructure, and cloud computing capacity. Details of the Offerings The $35 billion package consists of common stock and convertible preferred stock offered publicly. Meta described the capital as support for ongoing investment in data centers, computing capacity, and AI products as it competes with OpenAI, Anthropic, and other large AI developers. The subsequent at-the-market program of up to $60 billion would allow the company to sell additional shares over time once the Class C stock is trading, providing further flexibility without a single large secondary offering. As of September 30, Meta held $82.45 billion in cash, cash equivalents, and marketable securities, slightly above its long-term debt of $80.92 billion. Free cash flow turned negative in the third quarter as capital expenditures, including finance-lease principal payments, reached $34.91 billion. The equity offerings give the company additional balance-sheet capacity while free cash flow remains under pressure from the AI buildout. Class C Shares and Control Structure Meta’s board approved the new publicly listed, non-voting Class C common stock, effective in January 2027. Existing shareholders will receive one Class C share for each Class A or Class B share they hold through a one-time stock dividend, effectively creating a two-for-one split. The new shares can be used for capital raising, employee compensation, potential acquisitions, and general corporate purposes without diluting the voting control held by Class A and Class B shareholders, including founder and CEO Mark Zuckerberg. The structure mirrors earlier dual-class arrangements at other technology companies and is intended to preserve founder control while expanding the pool of equity available for financing. Trading of the Class C shares is expected to begin in the first quarter of 2027, after which the at-the-market program can commence. Scale of the AI Investment Meta has been increasing spending on advanced chips, data-center capacity, and related infrastructure to support both its core advertising business and new AI products. The company recently launched Muse, a consumer AI agent, and reported that more than 10 million people in the United States and Canada had set up accounts within roughly six weeks. Management has said AI investments are already contributing incremental advertising revenue through better recommendations and engagement, and that AI businesses are expected to begin generating incremental revenue in 2027 and become a meaningful source of diversification over time. Reality Labs, the unit previously focused on metaverse hardware, is being reoriented toward AI priorities. Operating losses in the unit are projected to narrow, with the company redirecting investment toward AI initiatives. Full-year 2026 capital expenditure is now guided at $135–145 billion, up from a prior low end of $130 billion. Future spending commitments of about $825 billion reflect multi-year leases, computing deals, and energy agreements tied to the infrastructure buildout. Market and Competitive Context The equity raise occurs amid a broader industry race for AI compute and talent. Competitors including OpenAI, Anthropic, Google, Amazon, and others are also committing large sums to data centers and model development. Meta’s decision to raise equity now is framed as securing capacity before additional large capital raises absorb available market liquidity. Investor reaction to the spending outlook has been mixed; shares declined after the earnings report on concerns about the scale and duration of the investment, even as third-quarter revenue of $64.6 billion exceeded estimates. The combination of cash on hand, the new $35 billion offering, the planned $60 billion at-the-market program, and the non-voting share class gives Meta multiple tools to fund the expansion while limiting dilution of voting power. Whether the investments translate into sustained revenue growth beyond advertising will depend on adoption of Muse and other AI products, improvements in compute efficiency, and the competitive environment. What to Watch Progress and pricing of the $35 billion stock and convertible preferred offerings. Timing of Class C share listing and initiation of the at-the-market program. Actual 2026 capital expenditures relative to the $135–145 billion guidance. Adoption metrics and early revenue contribution from Muse and related AI features. Any further updates to long-term spending commitments or free-cash-flow outlook. Meta Platforms launched public offerings of about $35 billion in common stock and convertible preferred stock on October 26 to help finance its AI expansion. The company also plans an at-the-market program of up to $60 billion once new non-voting Class C shares begin trading in early 2027. The moves follow a raised 2026 capital-expenditure outlook of $135–145 billion and future spending commitments of roughly $825 billion focused on data centers and AI infrastructure. Meta held about $82.45 billion in cash and marketable securities as of September 30, with free cash flow turning negative in the third quarter amid heavy capital spending. The new share class is designed to support fundraising and compensation while preserving existing voting control.