Meta Platforms shares slipped in early trading on Monday before rebounding after the company announced a $35 billion equity raise aimed at funding its artificial intelligence ambitions. The stock fell as much as 4% before recovering to trade roughly 1% higher, following a sharp sell-off last week. Meta also outlined plans for a separate at-the-market offering programme of up to $60 billion once its newly introduced non-voting Class C shares begin trading, expected in the first quarter of 2027.
The fundraising comes shortly after Meta reported strong third-quarter results. Revenue rose 26% year over year to $64.6 billion, while advertising sales increased 26% to about $63.1 billion. Adjusted earnings per share came in at $7.40, excluding a roughly $9.9 billion legal charge tied to a child-safety settlement. Meta projected fourth-quarter revenue of $73 billion to $76 billion, ahead of previous consensus estimates. However, the company raised its 2026 capital expenditure outlook to between $135 billion and $145 billion and reported negative free cash flow of about $2.1 billion for the quarter. Meta has also signalled future spending commitments of around $825 billion connected to data centres, computing capacity and related agreements.
Nvidia, AMD and Broadcom have expressed interest in buying up to $5 billion of Meta's new Class A common stock as so-called Cornerstone Investors. The interest is part of a $22.5 billion common stock offering, though the arrangements are non-binding and any of the chipmakers could buy more, fewer or no shares. Morgan Stanley and Goldman Sachs are acting as forward purchasers, with Meta delivering shares and receiving cash on dates it selects no later than Nov. 19, 2027. Another $12.5 billion is being raised through depositary shares representing interests in Series A mandatory convertible preferred shares, expected to convert into common stock on or around Aug. 15, 2029. Analysts broadly viewed the move positively, with Piper Sandler maintaining an Overweight rating and an $850 price target, while Bank of America raised its target to $845 from $810.
