Meta plans to raise $95 billion through equity financing to invest in AI infrastructure; Nvidia, AMD, and Broadcom intend to subscribe up to $5 billion

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Social media giant Meta plans to conduct an equity financing worth $95 billion to fund its increasingly massive AI (artificial intelligence) buildout.

In a regulatory filing submitted on October 26 local time, Meta wrote that the company has launched a public equity offering of approximately $35 billion and plans to raise up to an additional $60 billion through an at-the-market offering program for a new class of non-voting Class C shares.

Meta said these plans will support its "continued investment in AI infrastructure and personal superintelligence." The company emphasized that it is "investing with strict financial discipline": "Meta's AI investments have already delivered tangible returns by increasing user engagement, improving advertising performance and increasing monetization capability."

Of the $35 billion financing plan that has been launched, approximately $22.5 billion consists of Class A common stock and approximately $12.5 billion consists of depositary shares (representing Class A mandatory convertible preferred stock). This depositary share offering involves 250 million shares, each representing a 1/20 interest in a preferred share.

Meta intends to use the net proceeds from this depositary share offering for general corporate purposes, while the Class A stock offering is related to forward contracts signed with Morgan Stanley and Goldman Sachs. Meta expects to grant the underwriters a 30-day over-allotment option to purchase up to an additional 37.5 million depositary shares and up to an additional $3.375 billion of Class A stock.

Meta also said that Nvidia, Advanced Micro Devices (AMD) and Broadcom have expressed interest in subscribing to a total of up to $5 billion of Class A stock in this offering. However, this expression of interest is non-binding.

Regarding the separate $60 billion at-the-market offering program, Meta said the company has not signed any agreement for the plan, and its specific timing, size and terms have not been determined. The plan is not expected to launch earlier than the first quarter of 2027, and there is no guarantee that the plan will proceed.

On October 21, Meta announced its financial results for the third quarter of fiscal year 2026, announcing that the company will issue non-voting Class C common stock in January 2027 and distribute this new class of stock to existing investors in the form of a stock dividend. Meta said its practical effect is equivalent to a "2-for-1" stock split.

Although Meta's third-quarter revenue was higher than expected, the company continued to raise the lower bound of its full-year capital expenditure forecast, free cash flow turned negative for the first time, and total future spending commitments soared from about $700 billion in July this year to $825 billion. These negative factors together intensified market concerns about the stability of AI financing.

In the regulatory filing, Meta wrote that the company expects capital expenditures in 2026 to be between $135 billion and $145 billion, and the company plans to fund this through a combination of cash flow from operating activities, investment-grade debt, strategic partnerships and equity capital.

Meta generated a total of $97 billion in operating cash flow in the first three quarters of 2026 and had approximately $82 billion in cash, cash equivalents and marketable securities at the end of the third quarter.

(Source: The Paper) Body middle Embedded advertisement