Meta Platforms Inc. is planning to raise between $20 billion and $25 billion through an investment-grade bond sale to fund its aggressive artificial intelligence infrastructure push, according to sources familiar with the matter. The offering is expected to be split into as many as six tranches, including a potential 2066 long-dated note with initial yield discussions of up to 1.8 percentage points above US Treasuries. Citigroup Inc. and Morgan Stanley are managing the deal.
The bond sale comes shortly after Meta reported stronger-than-expected first-quarter sales, but investor focus quickly shifted to the company’s significantly raised capital expenditure outlook. Meta now expects capex to reach $135 billion at the midpoint for the year, up from $125 billion previously, citing “higher component pricing this year.” This marks a roughly 7.4% increase from its earlier forecast, exceeding analyst expectations.
Market reaction was swift: Meta shares fell as much as 9.5% in premarket trading in New York on Thursday, with the stock ultimately dropping around 10% in early trading. Despite reporting adjusted earnings per share of $10.44 — well above Wall Street expectations of $6.67 — and revenue of $56.3 billion (up 33% year-on-year), the spending concerns overwhelmed the earnings beat.
Wall Street analysts responded by cutting price targets. Cantor Fitzgerald lowered its target to $750 from $850, warning the capex increase “is likely to resurface debates on Meta’s capex return on investment capital.” Stifel reduced its target to $780 from $805, while Guggenheim cut to $800 from $850. BMO Capital was among the most bearish, lowering its target to $720 from $730 and raising capex projections for 2026 and 2027. KeyBanc retained a $760 target, describing Meta as in a “show me” phase of the AI cycle.
CEO Mark Zuckerberg defended the spending strategy during an earnings call, stating he has “confidence” in the company’s decision, but acknowledged Meta lacks “a very precise plan” for developing each AI product. CFO Susan Li added that “our experience so far has been that we have continued to underestimate our compute needs.” The company also opted not to repurchase shares during the quarter, putting further pressure on free cash flow.
The bond sale follows a wave of large debt deals across Big Tech, including Amazon raising nearly $54 billion in March, Alphabet pricing around $32 billion in notes, and Oracle securing $25 billion with peak demand of $129 billion. The four largest hyperscalers are now expected to collectively spend as much as $725 billion this year on AI-related investments.
Despite investor caution, Meta’s core advertising business showed strength: daily active people rose 4% year-on-year to 3.6 billion, ad impressions increased 19%, and prices rose 12%. The company’s previous bond sale in October attracted approximately $125 billion in orders, setting a record.
