Meta launches $35 billion stock offering and plans a $60 billion at-the-market program to fund AI spending

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Meta Platforms has launched an equity financing of unusual scale for a listed technology company, opening roughly $35 billion of underwritten stock offerings on October 26, 2026 and disclosing a separate plan to sell up to $60 billion of its new non-voting Class C shares through an at-the-market program starting in 2027. Taken together, the announced capacity reaches about $95 billion, and the company ties it directly to the cost of the data centers, compute and infrastructure behind its artificial intelligence strategy, for which it expects capital expenditures of $135 to $145 billion in 2026 alone.

The terms are set out in an issuer free writing prospectus that Meta filed with the U.S. Securities and Exchange Commission on the same day, alongside a preliminary prospectus supplement and a company press release. The underwritten part combines two instruments: about $12.5 billion of depositary shares representing a newly created Series A Mandatory Convertible Preferred Stock, and about $22.5 billion of Class A common stock sold in connection with forward sale agreements. Morgan Stanley and Goldman Sachs are acting as lead joint bookrunning managers. The filing also states that NVIDIA, AMD and Broadcom have indicated an interest in buying up to $5 billion of the common stock on the same terms as other investors, an arrangement that places three of Meta's main hardware suppliers among the prospective buyers of its equity.

The financing arrives five days after Meta reported third-quarter results that showed both the strength of its advertising business and the strain that infrastructure spending is now placing on its cash generation. Revenue rose 26% year over year to $64.6 billion, but capital expenditures of $34.91 billion in the quarter exceeded operating cash flow of $32.79 billion, leaving free cash flow negative at about $2.1 billion. The equity program is Meta's answer to that gap, and the company describes it as one part of a funding mix that also includes operating cash flow, investment-grade debt and strategic partnerships.

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THE STRUCTURE OF THE UNDERWRITTEN OFFERINGS.

The preferred component consists of 250 million depositary shares, each representing a 1/20th interest in one share of Series A Mandatory Convertible Preferred Stock with a liquidation preference of $1,000 per share, which corresponds to $50 of liquidation preference per depositary share. The preferred shares are scheduled to convert mandatorily on or around August 15, 2029 into a variable number of Class A common shares determined by a conversion rate. Meta states that the dividend rate, the conversion terms and the remaining economic terms will be fixed at pricing, so the filing does not yet disclose the coupon or the conversion band that investors will ultimately receive. The company intends to apply for a listing of the depositary shares on the Nasdaq Global Select Market under the symbol METAM, and the underwriters are expected to receive a 30-day option on up to 37.5 million additional depositary shares.

The common stock component works differently from a conventional follow-on sale. The roughly $22.5 billion of Class A shares will be sold to the public by the forward purchasers, affiliates of Morgan Stanley and Goldman Sachs, which borrow the shares and enter into forward sale agreements with Meta. Meta therefore does not expect to receive proceeds when the shares are first sold. It receives cash later, at the applicable forward sale price, when it chooses to settle the agreements on dates it specifies on or before November 19, 2027. The filing adds that in certain circumstances Meta will be able to settle all of the forward agreements by delivering only Class C common stock rather than Class A shares. Underwriters are expected to receive a 30-day option on an additional $3.375 billion of common stock.

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Component	Size disclosed	Key terms
Mandatory convertible preferred	250M depositary shares (about $12.5B)	1/20th of a $1,000 preferred share; converts around Aug 15, 2029
Preferred option	Up to 37.5M depositary shares	30-day underwriter option
Class A common stock	About $22.5B	Sold via forward sale agreements; settlement by Nov 19, 2027
Common stock option	Up to $3.375B	30-day underwriter option
Class C at-the-market program	Up to $60B	Not expected to start before Q1 2027; no agreement signed yet
Cornerstone interest	Up to $5.0B	NVIDIA, AMD and Broadcom; non-binding indications

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The use of proceeds is described in general terms. Net proceeds from the depositary shares are earmarked for general corporate purposes, as are the proceeds Meta will eventually receive when it settles the forward agreements. The filing does not allocate specific amounts to data centers, chips or particular AI projects, although its business description frames the raise around expanding the infrastructure and compute capacity needed for Meta's AI opportunities.

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THE $60 BILLION CLASS C AT-THE-MARKET PLAN.

The larger and more distant part of the plan depends on a share class that does not exist yet. On October 21, together with its quarterly results, Meta announced that its board had approved a new publicly listed, non-voting Class C common stock, to be created through an amended and restated certificate of incorporation effective January 19, 2027. Every outstanding Class A and Class B share will receive one Class C share as a one-time stock dividend, with record and payment dates still to be set by the board. Meta said it expects the market price of Class A stock to reflect a two-for-one split once the dividend is paid, and that the distribution will not change any shareholder's voting power. The company listed financing growth, employee compensation and potential acquisitions among the purposes of the new class.

The at-the-market program would use that class. According to the prospectus, Meta plans to sell Class C shares from time to time up to a maximum aggregate offering amount of $60 billion, but the program depends on Class C trading having started and is not expected to begin until the first quarter of 2027. Meta has not entered into any agreement for it, and the filing states that timing, size and terms remain undetermined. In practice, the $60 billion figure is a ceiling on a future, flexible selling program rather than a committed sale, and the pace at which shares reach the market would depend on how much capital Meta decides it needs.

The choice of a non-voting class is significant for governance. Selling Class C shares lets Meta raise large amounts of equity without diluting the voting power attached to its existing Class A and Class B shares. The October 21 announcement explicitly tied the new class to the board's conclusion that Mark Zuckerberg is best placed to lead the company into its next phase.

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WHY META NEEDS EXTERNAL CAPITAL FOR ITS AI BUILDOUT.

Meta's own figures explain the timing. The company narrowed its 2026 capital expenditure outlook to $135 to $145 billion, from a previous range of $130 to $145 billion, and spent $34.91 billion in the third quarter alone, including principal payments on finance leases. The prospectus notes operating cash flow of $97 billion across the first three quarters of 2026 and cash, cash equivalents and marketable securities of about $82 billion at the end of September, which shows that the business still generates very large amounts of cash. In the third quarter, however, spending absorbed all of the cash the operations produced, and Meta has not yet given a capital expenditure outlook for 2027, saying only that it is still developing its budget and intends to keep investing aggressively in the core business and in AI.

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Metric (Q3 2026 unless noted)	Value
Revenue	$64.6B, up 26% year over year
Net income	$9.86B
Operating income	$13.0B, including a $9.89B legal charge
Capital expenditures	$34.91B
Operating cash flow	$32.79B
Free cash flow	About -$2.12B
Cash and marketable securities	About $82B
2026 capex outlook	$135B to $145B
Q4 2026 revenue guidance	$73B to $76B

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The quarterly report also helps explain why the company prefers to spread the burden across instruments. Meta's operating income fell 37% to $13.0 billion because of a $9.89 billion legal charge, which pushed its operating margin down to 20% from 40% a year earlier; excluding that charge, operating income would have been $22.88 billion. Mandatory convertible preferred stock is typically treated by rating agencies as having a substantial equity component, and forward sale agreements allow an issuer to lock in a share price while deferring dilution until the cash is actually needed. Meta's prospectus describes its current credit ratings as Aa3 and AA-, and the equity-heavy structure is consistent with a company that wants to keep borrowing capacity available while funding a multi-year infrastructure program.

The company's case to investors rests on AI returns that it says are already visible. The prospectus states that its AI investments are producing results through engagement, advertising performance and monetization, and cites more than 10 million early users of its Muse models in the United States and Canada and more than 2 million businesses using Business Agent every week. Meta also points to six consecutive quarters of revenue growth above 20% and 3.64 billion daily active people across its family of apps in September 2026.

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NVIDIA, AMD AND BROADCOM AS PROSPECTIVE INVESTORS.

The most unusual element of the filing is the cornerstone section. NVIDIA, AMD and Broadcom have, severally and not jointly, indicated an interest in purchasing up to $5.0 billion of Class A stock in the common stock offering, at the public offering price. Meta stresses that these are indications of interest and not binding commitments, so the three companies could buy more, less or nothing at all, and the filing does not break down how much each might take.

The arrangement links Meta's equity to the companies that supply much of the hardware its capital expenditure budget pays for. NVIDIA provides the GPUs at the center of most large AI training clusters, AMD sells competing accelerators and server processors, and Broadcom designs custom AI chips and networking silicon for hyperscale operators. A supplier buying shares in a major customer reduces, at the margin, the net external capital the customer must raise to buy that supplier's products, and this circularity has already become a point of debate around AI financing more broadly. The filing itself makes no claim about purchase agreements or volume commitments connected to the investment, and nothing in it ties the indications of interest to specific hardware orders.

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WHAT CHANGES FOR META SHAREHOLDERS AND INVESTORS.

For existing Class A holders, the immediate effect is prospective dilution, but its timing is staggered. Shares sold under the forward agreements are borrowed and sold now, but new Meta shares are only issued when the company settles, which can happen up to November 19, 2027. The mandatory convertible preferred adds a second layer that converts into Class A stock around August 2029, with the number of shares depending on the conversion rate and the share price at that time. The at-the-market program, if it is launched, would add Class C supply from 2027 onwards. Because pricing terms were not yet set in the filing, the exact number of new shares cannot be calculated from the disclosed information.

For investors seeking income or downside protection, the METAM depositary shares will be the new instrument to watch at pricing, when the dividend rate and conversion band are fixed. For shareholders who follow governance, the Class C plan means that future equity issuance is likely to be concentrated in non-voting shares, preserving the current balance of voting control. Shareholders will also receive one Class C share for each Class A or Class B share they hold after the stock dividend is paid in 2027, which is expected to roughly halve the quoted Class A price without changing the overall value of their holdings.

For users of Meta's products and for developers building on its models, nothing changes directly. The financing affects how Meta pays for its data center expansion rather than the features, pricing or availability of Meta AI, the Muse models or Business Agent, and the filing contains no product announcements.

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A FINANCING DESIGNED AROUND AN OPEN-ENDED SPENDING CYCLE.

What is established is the architecture of the deal: about $35 billion in underwritten offerings split between mandatory convertible preferred stock and forward-settled common stock, underwriter options that could add more than $5 billion, a planned $60 billion Class C at-the-market program from 2027, and non-binding interest of up to $5 billion from NVIDIA, AMD and Broadcom. Meta's own numbers show why it needs the money, with 2026 capital expenditures of $135 to $145 billion and a third quarter in which spending exceeded operating cash flow.

What remains open is substantial. The dividend rate and conversion terms of the preferred stock, the final size of each tranche after pricing, the amounts the three chipmakers will actually buy, the settlement timing of the forward agreements and the eventual use of the at-the-market program are all undetermined. The largest unknown is Meta's 2027 capital expenditure plan, which the company has not disclosed and which will determine how much of the announced capacity is ultimately drawn. Alphabet, Microsoft and Amazon report results later this week, and their spending guidance will show whether Meta's turn to equity markets is an isolated decision or an early sign of how the largest AI infrastructure buyers intend to finance the next phase of the buildout.

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