Original title: Meta (META.US) Expands Its AI War Chest! Plans Up to $95 Billion in Equity Financing
Author: Zhitong Finance Zhuang Lijia
Cover image source | Unsplash
According to Zhitong Finance, Meta is seeking up to $95 billion in equity financing to fund its artificial intelligence (AI) spending. In a statement on Monday, the company said it would issue approximately $35 billion in common and preferred stock, issue approximately $22.5 billion in Class A common stock through forward sale agreements, and issue approximately $12.5 billion in Class A mandatory convertible preferred stock depositary shares.
Meta said the net proceeds from these two offerings will be used for general corporate purposes, including AI infrastructure construction. Notably, Nvidia, AMD, and Broadcom intend to subscribe for up to a combined $5 billion in Class A common stock.
In addition, Meta said that after its Class C common stock begins trading (earliest expected in the first quarter of 2027), it plans to raise up to approximately $60 billion through an "at-the-market (ATM)" program. The program allows the company to sell shares in the public market from time to time.
The financing plan comes as Meta steps up investment in data centers, compute power, and AI products to compete with AI rivals such as OpenAI and Anthropic. Meta said: "AI is creating significant opportunities for Meta's core business and for new products and services. Meta's AI investments have already produced tangible returns, with increased user engagement, improved ad delivery, and enhanced monetization."
Meta said AI investment has delivered real returns through improved user engagement, better ad performance, and higher monetization efficiency, and will continue to invest in personal superintelligence, consumer and enterprise AI agents, AI glasses, and other businesses. The company plans to fund these investments through a combination of operating cash flow, investment-grade debt, strategic partnerships, and equity capital.
In its third-quarter results released last week, Meta said it expects capital expenditure of $135 billion to $145 billion in 2026. In the first three quarters of 2026, the company's operating cash flow was $97 billion; as of the end of the third quarter, cash, cash equivalents, and marketable securities stood at approximately $82 billion.
Additionally, Meta has agreed to spend approximately $825 billion in the future on various leases and contracts, many of which are closely linked to the vast AI compute resources and certain energy-related infrastructure required for the global wave of AI agents led by Muse.
Despite Meta's continued heavy investment in AI spending, at least 13 Wall Street financial giants announced upward revisions to Meta's price targets after the company reported earnings, which shows that even as AI capital expenditure demands grow ever larger, its growth prospects remain recognized. For example, both Bernstein and Morgan Stanley expressed optimism about Meta's AI business prospects. The two investment banks believe Meta's core advertising business continues to grow strongly, and its newly launched Muse personal intelligent assistant is beginning to show commercialization potential, which could open up new revenue sources beyond advertising. However, as AI infrastructure investment scales up, massive capital expenditure and future financing needs remain the main risks for investors to watch.
