Meta launches $35 billion of stock offerings and plans a $60 billion share sale to fund AI

What Meta announced

Meta Platforms on Monday, 26 October, launched two public stock offerings worth about $35 billion combined, to pay for its artificial intelligence build-out. According to the company's press release, the package is roughly $22.5 billion of Class A common stock sold through forward sale agreements and about $12.5 billion of mandatory convertible preferred stock, sold as 250 million depositary shares.

The release calls the two deals the first part of a wider financing plan. The second part is an at-the-market programme of up to $60 billion in the new non-voting Class C shares that Meta announced last week, which it does not expect to start before the first quarter of 2027. AI Lookout covered that share-class change in our report on Meta's Class C plan. Put together, the plan points to as much as $95 billion of new equity over the next year or so, on top of the debt Meta already carries.

Morgan Stanley and Goldman Sachs are the lead joint bookrunners. Meta says it will use the money for general corporate purposes, and the release frames it as support for its push into what the company calls personal superintelligence. Reuters, as published by CNA, reported that the fundraising comes as Meta ramps up spending on data centers, computing capacity and AI products to compete with OpenAI and Anthropic.

How the forward sale works

The common stock half is structured so that Meta does not receive most of the money on day one. Morgan Stanley Capital Services and Goldman Sachs act as forward purchasers. They, or their affiliates, borrow and sell $22.5 billion of Class A shares to investors now, and Meta agrees to deliver new shares to them later in exchange for cash at the offering price, minus underwriting discounts and some adjustments.

Meta says it does not expect to receive any proceeds up front from this part of the deal. Instead, it can choose one or more settlement dates on or before 19 November 2027. That lets the company lock in today's price while drawing the cash down when it needs it, and it delays the point at which new shares are actually issued and existing holders are diluted.

Underwriters get a 30-day option to buy up to $3.375 billion more Class A stock. If they use it, Meta would sign additional forward agreements on the same basis. Once the Class C shares exist and certain conditions are met, the forward agreements will reference both classes, and in some circumstances Meta could settle all of them by delivering only non-voting Class C shares. That detail matters for control: Class C stock would raise money without adding votes to the share register.

The mandatory convertible preferred

The second deal is 250 million depositary shares, each representing a one-twentieth interest in a share of newly issued Series A Mandatory Convertible Preferred Stock. The preferred stock is expected to carry a liquidation preference of $1,000 per share, which makes each depositary share a $50 unit and the whole offering about $12.5 billion. Underwriters have an option on 37.5 million more depositary shares.

Mandatory convertibles pay a fixed dividend and then turn into common stock on a set date. Meta's will convert automatically, for settlement on or about 15 August 2029, into a variable number of Class A shares based on a conversion rate. If the Class C stock has been issued and other conditions are satisfied, they will convert into Class C shares instead. The dividend rate and conversion terms will be set at pricing, so the cost of this money was not public when AI Lookout read the release.

Meta plans to list the depositary shares on the Nasdaq Global Select Market under the ticker METAM. There is currently no public market for them. The two offerings are independent: neither depends on the other closing.

The $60 billion share sale that comes next

The largest number in the release belongs to a programme that does not exist yet. Meta says it intends to sign an equity distribution agreement under which it may sell Class C stock from time to time, through or to a manager, up to $60 billion in total. At-the-market programmes let a company sell shares gradually into normal trading instead of in one large block.

Meta is careful to say it has not entered into any agreement for this programme and that its timing, size and terms have not been determined. It also says there is no assurance the programme will be set up at all. The release says sales under it are not expected to begin until the first quarter of 2027, after Class C trading starts, and that they are not conditioned on the underwritten offerings.

That timeline lines up with last week's announcement, in which Meta said the Class C stock would be created on 19 January 2027 and handed out as one Class C share for every existing share. The new class gives the company a currency it can sell repeatedly without shifting voting power away from Mark Zuckerberg, who controls the company through high-vote Class B stock.

Chipmakers in the order book

Three of the suppliers that sell Meta the chips for its data centers are also lining up to buy its shares. A summary of the release published alongside it on StockTitan says NVIDIA, AMD and Broadcom have indicated interest in buying up to $5.0 billion of Class A stock in aggregate in the common offering. The release describes them as cornerstone investors buying at the same price and on the same terms as other buyers.

Those indications are not binding. The release says any of the three could buy more, fewer or no shares, and that the underwriters could allocate more, fewer or none to them. The banks earn the same discount on shares sold to the chipmakers as on any other shares.

The arrangement adds to a pattern of AI suppliers and customers financing each other. Chipmakers that depend on a handful of very large buyers now hold stakes in some of those buyers, and AI companies are also leaning on debt markets. SpaceX, for example, said it had closed $40 billion of GPU-backed debt, as AI Lookout reported in our story on Musk's neocloud warning.

Why Meta is raising equity now

The release sets out the spending Meta is trying to fund. It expects capital expenditures of $135 billion to $145 billion in 2026. It says it owns data centers in 23 US states, is building four superclusters with more than one gigawatt of capacity each, and is on track to nearly double its total infrastructure capacity this year compared with last.

One of those clusters is Prometheus in Ohio, which Meta said trained its Muse Wonder model; AI Lookout covered it in our look at the Prometheus supercluster. Meta says it will fund the build-out through a mix of operating cash flow, investment-grade debt, strategic partnerships and equity, and calls the new stock sales a complementary source of capital that diversifies its funding.

Meta generated $97 billion of operating cash flow in the first three quarters of 2026 and had about $82 billion of cash, cash equivalents and marketable securities at the end of September, the release says. Reuters, citing last week's quarterly filing, put cash and securities at $82.45 billion, slightly above long-term debt of $80.92 billion, and said the company has committed to spend about $825 billion in the future, mainly on data centers, AI infrastructure and cloud computing capacity. Meta points to its Aa3 and AA- credit ratings as proof it can still borrow cheaply.

To make the case to investors, the release lists the business behind the bet. It says 3.64 billion people used at least one Meta app daily in September, that third-quarter revenue was $64.6 billion, up 26%, with net income of $9.9 billion, and that revenue has grown more than 20% year over year for six quarters in a row. It says Muse, its consumer agent, onboarded more than 10 million users in the US and Canada in the early weeks after launch, with shopping the top use, and that more than 2 million businesses use its Business Agent each week.

What to watch

Pricing comes next. The size of the common offering is fixed in dollars, so the share count depends on the price, and the preferred dividend rate will show how much Meta is paying for this money. Those terms will appear in the final prospectus on the SEC's EDGAR system.

The bigger question is how investors take the dilution. Equity is usually the most expensive way for a large, profitable company to raise money, and Meta is choosing it while it still has investment-grade ratings and tens of billions in cash. The release presents the move as diversification. Investors will judge it against the returns Meta can show from products such as the Muse Wonder models and its planned enterprise platform.

Meta is not alone in needing more capital than its cash flow provides. Amazon has said AWS is sold out of capacity for 2026 despite enormous spending, as AI Lookout reported in our story on Andy Jassy's capex comments. Meta's offering is the clearest sign yet that the largest AI spenders are now willing to sell stock, not just bonds, to keep building.