Meta Platforms META shares fell in early trading on Monday before recovering, as the company announced a $35 billion equity raise to fund its artificial intelligence ambitions amid persistent investor concerns about its spending plans.
Shares of Meta fell close to 2% in early trading but gained roughly 0.2% around 11:20 AM EST following last week’s sharp sell-off.
Meta also outlined plans for a separate at-the-market offering programme of up to $60 billion once its newly introduced non-voting Class C shares begin trading, which is expected in the first quarter of 2027.
The fundraising comes days after Meta reported strong third-quarter results, although the earnings report also underscored the mounting cost of its AI investments.
Meta turns to equity markets to finance AI expansion
Meta’s latest capital-raising plans come as investors weigh the company’s ability to sustain heavy spending on AI infrastructure while protecting profitability and shareholder returns.
The company’s third-quarter revenue rose 26% year over year to $64.6 billion, beating analyst estimates. Advertising sales, its main source of income, also increased 26% to about $63.1 billion.
Adjusted earnings per share came in at $7.40, excluding a roughly $9.9 billion legal charge related to a child-safety settlement. Meta also projected fourth-quarter revenue of $73 billion to $76 billion, ahead of the previous consensus estimate.
Despite the strong operating performance, investors remain concerned about the cost of expanding Meta’s AI capabilities.
The company raised its capital expenditure outlook for the year to between $135 billion and $145 billion, while reporting negative free cash flow of about $2.1 billion for the quarter.
Meta has also signalled spending commitments of around $825 billion connected to data centres, computing capacity and related agreements, adding to concerns over how much capital it will need to support its AI push.
Share sale draws analyst support
While the concerns around financing continue to weigh heavily on investors’ minds, Piper Sandler sees the recent equity offering plans as a positive step.
Alongside future revenue hopes from Meta’s much-hyped AI agent Muse, a largely bullish long-term tone from analysts keeps helping the stock.
Piper Sandler analyst Thomas Champion said Meta’s $35 billion equity offering and plans for a further $60 billion at-the-market programme could help ease some of those concerns.
The firm views the announcement positively, arguing that it removes an overhang on the stock, is less dilutive than investors had feared, indicates strong demand from key AI players and gives Meta additional funding to continue investing in AI.
Piper Sandler maintains an Overweight rating on Meta, with a price target of $850.
Bank of America also raised its price target on Meta to $845 from $810, while reaffirming its Buy rating and continuing to identify the company as one of its top AI investment ideas.
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