Meta has launched about $35 billion in stock offerings and outlined a possible $60 billion more, which could bring in up to $95 billion for AI expansion, but not all of the money is raised or guaranteed.
How the offerings are structured
Current offerings combine about $22.5 billion in Class A common stock and roughly $12.5 billion in depositary shares representing mandatory convertible preferred stock. Meta says common-stock proceeds will arrive when forward sale agreements are settled, not immediately.
The proposed $60 billion would come later through new non-voting Class C shares. Meta has not signed an agreement, and the program’s size, timing and terms remain undecided. It may be possible only after the class begins trading, currently anticipated in the first quarter of 2027.
Why the spending is growing
Meta is building data centers and securing computing capacity to develop and run AI models and add AI products to its apps. It competes with OpenAI and Anthropic and is promoting its Muse AI agent and Muse Wonder model. Meta expects AI to improve existing services and support new ones, but potential returns are not yet clear.
Third-quarter revenue rose 26% year over year to $64.6 billion, while capital spending reached $34.9 billion. Cash from operations was $32.8 billion, leaving free cash flow negative by $2.1 billion. Meta expects 2026 capital spending of $135 billion to $145 billion. At the end of September, it held $82.45 billion in cash, cash equivalents and marketable securities, slightly more than its $80.92 billion in long-term debt.
What the share sales mean
Meta intends to fund investment through operating cash flow, investment-grade debt, partnerships and equity. Borrowing adds interest and repayment obligations; stock sales avoid those fixed payments but give investors a claim on future earnings. This is a general financing rationale, not Meta’s stated explanation for this mix. Meta has not said it is replacing cash or debt with equity; it is adding another funding option as spending grows faster than quarterly free cash flow.
New common shares could dilute existing shareholders by reducing each share’s portion of the company. Preferred shares are designed to convert into common stock, while Class C shares would carry no vote. A proposed one-for-one Class C dividend for existing shareholders is separate from dilution caused by issuing additional shares.
The risk behind the investment
Meta disclosed about $825 billion in future leases and contractual commitments, much of it connected to data centers, energy, cloud computing and hardware. This is not a bill due now: commitments span different periods, some leases begin years later, and not every dollar is for AI. If demand grows as Meta expects, the infrastructure could support valuable products; if demand, use or costs disappoint, leases and contracts may be harder to scale back.
In the quarter, ad impressions rose 10% and average prices per ad rose 14%. CEO Mark Zuckerberg said the company’s investments were paying off and pointed to the launch of Muse and Muse Wonder. The figures do not show how much growth came directly from AI or whether the new products can earn enough to justify infrastructure costs.
What investors will watch
Investors will see the final terms and outcome of the current offerings, then whether Meta establishes the later Class C share-sale program. Nvidia, AMD and Broadcom have expressed interest in buying up to $5 billion of Class A shares, Reuters reported, but interest is not a binding purchase commitment. Quarterly results will show whether advertising can fund rising infrastructure costs and whether AI products become meaningful sources of value for users and shareholders.