Meta Platforms Inc. announced Monday it will raise up to $95 billion through stock sales to fund its artificial intelligence (AI) expansion, including data centers, cloud computing, and AI-related infrastructure. The company initiated a $35 billion public offering of common and convertible preferred stock, with plans for an additional $60 billion at-the-market share sale beginning in the first quarter of 2027.
The $35 billion offering consists of approximately $22.5 billion in Class A common stock and $12.5 billion in depositary shares representing preferred stock, according to a regulatory filing. Meta also disclosed that chipmakers Nvidia, Advanced Micro Devices (AMD), and Broadcom have expressed interest in purchasing up to $5 billion of its Class A common stock, though these commitments are non-binding.
Meta’s financial position and spending plans
As of September 30, Meta reported $82.45 billion in cash, cash equivalents, and marketable securities, slightly exceeding its $80.92 billion in long-term debt. However, the company recorded a $2.12 billion cash burn in the third quarter, marking its first negative free cash flow in over a decade, compared to a $10.63 billion positive cash flow a year prior.
Meta has committed to spending approximately $825 billion on future infrastructure, primarily for data centers, AI-related projects, and cloud computing capacity. The company raised its 2024 capital expenditure forecast to between $135 billion and $145 billion, up from a previous range of $130 billion to $145 billion. Third-quarter revenue reached $64.60 billion, exceeding Wall Street estimates of $63.37 billion, while fourth-quarter revenue is projected between $73 billion and $76 billion.
Strategic rationale behind the fundraising
Meta stated in a press release that AI presents significant opportunities across its core business and new products, including its goal of delivering personal superintelligence to billions of users and businesses. The company emphasized the need to expand infrastructure and computing capacity to support these initiatives.
Meta’s stock rose 1.6% in premarket trading following the announcement, reflecting investor reaction to the fundraising plans. The company’s push into AI infrastructure aligns with its efforts to compete with rivals such as OpenAI and Anthropic, which have also invested heavily in AI development.
Market and competitive context
The announcement follows Meta’s increased spending on AI-related products and infrastructure, as it seeks to enhance its position in the AI market. The company’s long-term debt remains manageable relative to its cash reserves, but the $2.12 billion cash burn in Q3 underscores the financial strain of its AI expansion.
Meta’s stock offering is structured to provide flexibility, with the $60 billion at-the-market program dependent on the future trading of its new non-voting Class C shares, expected to begin in early 2027. The timing and scale of the offering reflect Meta’s confidence in its ability to secure investor support for its AI-driven growth strategy.