The company starts with $35 billion in public offerings and lines up $60 billion for 2027
TF reports Meta is launching a stock offering worth up to $95 billion (about €84.6 billion) to fund AI.
Big numbers, short fuse. The first $35 billion went to market on 26 October, days after earnings showed negative free cash flow.
What’s Happening & Why It Matters
Breaking Down the $95 Billion
Meta (@Meta) split the plan into two phases. Phase one is $35 billion (about €31 billion) of concurrent underwritten public offerings, led by Morgan Stanley and Goldman Sachs. Of the $35 billion, $22.5 billion (about €20 billion) is Class A common stock sold through forward sale agreements. The other $12.5 billion (about €11.1 billion) is mandatory convertible preferred stock in depositary shares, listed on Nasdaq as METAM.
The forward agreements settle by 19 November 2027, and the preferred shares convert around 15 August 2029. Phase two is a $60 billion (about €53 billion) at-the-market programme, due to start in the first quarter of 2027. The programme relies on a new class of common stock, Class C. Selling in slices limits pressure on the share price.
Why Meta Chose Equity
Meta paid for earlier builds from advertising cash. The AI race changed the maths. Third-quarter revenue rose 26% to $64.6 billion (about €57.5 billion). Capital spending of $34.91 billion (about €31.1 billion) drove free cash flow to negative $2.12 billion (about €1.89 billion).
Full-year capital spending guidance runs from $135 billion to $145 billion (about €120 billion to €129 billion). Management told investors the company will need “hundreds of billions of dollars” over several years. Reports say the sale is Meta’s first stock issue since 2013.
Chip Makers Circle
Reports link Nvidia, AMD and Broadcom to up to $5 billion (about €4.5 billion) of Class A share purchases. The firms supply chips for Meta’s superclusters, so the money loops back to suppliers. Meta has not published terms of any anchor orders.
Market reaction is mixed. One report has shares up 1.6% in premarket trading after the announcement. Another records a 7% drop on the Thursday after earnings.
The Impact on the Sector
Rivals are watching. Anthropic filed IPO papers the same day, and AI spending outruns what even the richest advertising businesses generate. TF covered Meta’s first frontier model in Meta Muse Wonder: First Frontier AI Model.
My take: Selling stock instead of issuing more debt is the honest route. Existing holders will bear dilution, and the mandatory convertible adds more in 2029. The risk is the loop: chip suppliers fund the buyer who buys their chips. Meta needs to show AI returns in ad revenue soon, or the next raise gets harder.
TF Summary: What’s Next
Meta is marketing the first $35 billion and plans to open the at-the-market programme in the first quarter of 2027. Analysts will track dilution, free cash flow and capital spending guidance. Other hyperscalers may copy the equity route.
MY FORECAST: Meta will complete phase one by the end of October. At least one other Big Tech firm will announce a large equity or convertible raise for AI by mid-2027. Meta’s 2027 capital spending guidance will exceed $145 billion.
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