Meta Prices $37.5 Billion of Stock to Fund AI

MENLO PARK, Calif., Oct. 26 — MetaMeta has priced $37.5 billion of new common and preferred stock to help pay for its artificial-intelligence build-out, and Nvidia, which sells it chips, said it would invest $3 billion in the offering.

The pricing, in a release time-stamped 1:01 a.m. Eastern on Tuesday, set $25.0 billion of Class A shares at $625.00 each, upsized from $22.5 billion, and $12.5 billion of 6.50 percent mandatory convertible preferred stock. Both are expected to close Thursday, Oct. 29. They are part of a plan that also includes selling up to $60 billion of Meta’s new Class C stock, which it does not expect to start until the first quarter of 2027.

Meta, which bought back $26.25 billion of its own stock in the first nine months of 2025 and none in the same months of 2026, is now selling new shares, and its shareholders will bear part of the cost in dilution. Before any adjustment for Meta’s planned distribution of Class C stock, the two offerings equal 57 million to 60 million Class A shares before the underwriters’ options, about 2.2 to 2.3 percent of the 2.56 billion Class A and Class B shares outstanding at Sept. 30, by this paper’s arithmetic; the eventual classes and counts can change. The $60 billion program would add more.

Some of the money may come from chipmakers. Nvidia, Advanced Micro Devices and Broadcom “indicated an interest in purchasing up to an aggregate of $5.0 billion” of the common stock, Meta’s filings say, indications that are “not binding agreements or commitments to purchase.” Nvidia said separately that it “will invest $3 billion in Meta’s equity offering,” and that Meta intends to expand its deployment of Nvidia’s Vera Rubin and Vera CPUs.NVDANasdaq204.64▼9.02−4.2%Nvidia · Friday’s session The pricing release does not say how much stock the three bought.

The Associated Press called the indications “strong signals of interest from chip companies that stand to benefit from additional AI investments.” The chipmakers’ interest also gives “fuel to critics of ‘circular financing’ who say it raises the risk if AI isn’t as successful as expected,” AP reported.

Meta’s shares closed Monday at $630.56, down 1.88 percent. The stock “initially dropped more than 2%, but it quickly flipped to a gain and then pulled back to a loss of 1.9%,” AP reported. The $625.00 offering price is 0.88 percent below Monday’s close, and below the day’s low of $627.80.METANasdaq614.99▼9.53−1.5%Meta Platforms · Friday’s session

Meta’s Case

Under the heading “Investing with Financial Discipline,” Meta said it “expects $135 to $145 billion of capital expenditures in 2026,” and that it “generated $97 billion of operating cash flow in the first three quarters of 2026,” ending September with about $82 billion of cash and marketable securities. “The Company intends to fund these investments through a balanced mix of operating cash flow, investment-grade debt, strategic partnerships, and equity capital,” it said. Its “Aa3/AA- credit ratings allow it to raise long-term debt efficiently,” Meta said, and the stock sales are “a complementary source of capital.” Formally, the prospectuses earmark the proceeds for “general corporate purposes.”

The Company intends to fund these investments through a balanced mix of operating cash flow, investment-grade debt, strategic partnerships, and equity capital.

Meta had given notice. An information statement it filed on Oct. 21 said that it “anticipates needing to raise additional capital in the near term, including in the form of equity.” The same day, Susan Li, the finance chief, told analysts that the filing’s reference to “hundreds of billions of dollars” was “really a theoretical maximum,” adding: “It is not actually a description of our present equity financing needs or plans.”

The Terms

Meta gets most of the money later. Morgan Stanley and Goldman Sachs, or their affiliates, are expected to borrow 40 million Meta shares from third parties and sell them to the underwriters. Meta will deliver new shares for about $622.92 apiece, subject to adjustments, on dates it chooses on or before Nov. 19, 2027: about $24.9 billion before expenses, or $28.7 billion if the underwriters use their option.Selling ForwardMeta expects to record the forward agreements at fair value as derivatives, and warns that the gains or losses “may cause significant volatility in our reported financial results.”

The preferred is sold as 250 million depositary shares at $50, each a twentieth of a preferred share; Meta has applied to list them on Nasdaq as METAM. They pay 6.50 percent a year, or $812.5 million on $12.5 billion by this paper’s arithmetic, in cash or, within limits, in stock, when declared by the board. On or about Aug. 15, 2029, each converts into between 0.0681 and 0.0800 of a Class A share, depending on Meta’s average price over 20 trading days before then, or into Class C shares once those are issued and other conditions are met.Who Bears the RiskBelow the initial price, about the $625 offering price, buyers of the preferred “will bear the entire risk of a decline” in Meta’s stock, the prospectus says. Above it, they share in less of any rise than holders of the common stock.

Monday’s launch came a day after Elon Musk wrote that debt markets had “almost entirely shut off access to money for any company that doesn’t have substantial revenue independent of AI data centers,” and that “SpaceX closed $40B of debt for GPUs.” SpaceX’s 8-K, filed at 8 a.m. on Monday, described something narrower: a “binding commitment letter,” signed Saturday, to lease GPU pods from an entity managed by Apollo Global Management, with about $40 billion of principal payments over the lease terms and a fixed rate that “will be determined at pricing.” SpaceX’s entry into the lease, subject to closing conditions, “is expected to close prior to year end.” After Monday’s close, Bank of America, Blackstone, Citi and Morgan Stanley announced a $63 billion financing, through a new special purpose vehicle, to buy Broadcom chips and networking gear to be leased to Anthropic.

What to watch: the closing on Thursday, METAM’s first trades, whether the underwriters take up 30-day options that would lift the offerings to about $43.1 billion, and what Microsoft and Alphabet, reporting after Wednesday’s close, and Amazon, on Thursday, say about how they will pay for their own build-outs.