Meta Shares Recover, but a $60B AI Stock Plan Looms

TLDR

• Meta announced $35 billion in stock offerings and plans a separate $60 billion share sale program for 2027.
• Nvidia, AMD, and Broadcom expressed interest in purchasing up to $5 billion of Meta shares combined.
• Third-quarter revenue increased 26% to $64.6 billion, while free cash flow turned negative.
• Piper Sandler maintained its $850 Meta price target, while Bank of America retained its $845 target.
• Meta shares recovered from early trading losses, but rising AI infrastructure costs remain a concern for investors.

Meta shares swung between losses and gains Monday after the company announced a $35 billion stock offering to fund artificial intelligence projects. The stock fell nearly 2% early before turning slightly positive by late morning, following last week’s decline.

Meta Platforms, Inc., META

Meta Shares Recover as Company Plans Stock Sale

Meta plans to offer $22.5 billion in Class A common shares and $12.5 billion in securities linked to convertible preferred stock. The company expects to use the proceeds for general corporate purposes, including its AI expansion.

It separately plans a share sale program worth up to $60 billion after its new nonvoting Class C stock begins trading in early 2027. Meta has not finalized that program, and its actual fundraising could fall short.

Chipmakers Nvidia, AMD and Broadcom have expressed interest in buying up to $5 billion of Class A shares combined. Their proposed participation comes as Meta builds more data centers and expands its computing capacity.

Quarterly Revenue Growth Meets Higher AI Costs

Meta reported third-quarter revenue of $64.6 billion, up 26% from a year earlier. A report on Meta’s earnings covered stronger advertising sales and new Muse AI models.

The company earned $3.83 per share under standard accounting rules. Excluding a $9.89 billion legal settlement charge, earnings would have reached $7.40 per share. Fourth-quarter revenue guidance stands at $73 billion to $76 billion.

Meta set its full-year capital spending forecast for 2026 at $135 billion to $145 billion. Third-quarter spending reached $34.91 billion, while free cash flow fell to negative $2.12 billion, compared with positive cash flow last year.

Analysts Assess Meta Shares and AI Funding

Other technology companies continue expanding computing facilities. Applied Digital’s Texas data center agreement involves a 51% stake in a planned 50-megawatt project, showing continued investment across the sector.

Piper Sandler analyst Thomas Champion said Meta’s fundraising plan could reduce uncertainty about financing. His firm maintains an Overweight rating and an $850 price target. Bank of America retains a Buy rating and an $845 target.

Meanwhile, Hyperscale Data’s Michigan AI project targets initial operations in December. Its expansion reflects the broader race to secure computing capacity, even as Meta investors question rising costs. Meta shares remain below levels seen before the earnings sell-off.

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