On October 26, Meta Platforms ( NASDAQ : META ) announced the launch of a public equity financing with a total scale of approximately $35 billion to support the construction of artificial intelligence infrastructure. Of this, $22.5 billion will be raised through forward sales agreements of Class A common stock, and $12.5 billion will come from newly issued mandatory convertible preferred stock.

NVIDIA, AMD, and Broadcom have expressed their intention to subscribe for a total of up to $5 billion in Meta shares. Meanwhile, Meta plans to launch a Class C common stock issuance program worth approximately $60 billion in the first quarter of 2027. If both plans are fully implemented, the total financing scale will reach $95 billion, indicating that Meta is accelerating the use of external capital to support substantial AI investments.

I. Launching a $35 billion financing round, three major chip suppliers are interested in participating

Meta This financing consists of two parts: one is the issuance of Class A common shares worth $22.5 billion through a forward sale agreement, and the other is the issuance of approximately $12.5 billion in Series A mandatory convertible preferred stock depositary receipts.

The company also plans to grant underwriters a 30-day over-allotment option, allowing them to purchase an additional maximum of 37.5 million preferred stock depositary receipts, as well as Class A common shares worth $3.375 billion. Morgan Stanley and Goldman Sachs act as the joint lead bookrunners for this issuance.

It is worth noting that NVIDIA, AMD, and Broadcom have all indicated their intention to subscribe for a total of up to $5 billion in the common stock issuance under the same conditions as other investors. However, these intentions are not binding, and it is not yet determined whether the three companies will ultimately participate or what the specific subscription amounts will be.

The preferred shares issued this time are expected to automatically convert into Class A or Class C common shares of Meta around August 15, 2029. The related depositary receipts are planned to be listed on NASDAQ under the code “METAM”. The settlement of the forward sale agreement for the common shares is expected to be completed no later than November 19, 2027.

II. AI has capital expenditures of up to $145 billion, and Meta turns to large-scale external financing

Meta The main background for this financing is the huge capital demand brought about by the construction of artificial intelligence infrastructure. The company expects its capital expenditures to reach $135 billion to $145 billion in 2026, which will be mainly used for AI data centers, computing equipment, and related infrastructure.

Despite the rapid expansion of capital expenditures, Meta's existing business still possesses a strong cash-generating capability. In the first three quarters of 2026, the company generated a total of $97 billion in operating cash flow; as of the end of the third quarter, cash, cash equivalents, and marketable securities totaled approximately $82 billion. Revenue in the third quarter increased by 26% year-over-year to $64.6 billion, with a net profit of $9.9 billion.

However, as the investment scale of AI continues to expand, Meta is further utilizing equity financing to supplement its sources of funds. This means that the company's future AI expansion will no longer rely solely on the cash flow generated by its existing business, and it may also bring new pressures of equity dilution.

III. Plans to raise an additional $60 billion next year; non-voting shares protect Zuckerberg's control

In addition to this $35 billion financing, Meta also plans to launch a Class C ordinary stock issuance program ( ATM ) worth approximately $60 billion in the first quarter of 2027. This program allows the company to gradually sell shares based on market conditions, but no formal agreement has been signed yet, so there is still uncertainty regarding the actual financing scale.

This arrangement is closely related to Meta's previous establishment of new Class C shares without voting rights. The company plans to issue these shares to existing shareholders on January 19, 2027, to provide more options for future large-scale equity financing.

As of October 1st, Mark Zuckerberg, the CEO of Meta, holds 13.4% of the company's shares but possesses 60.6% of the voting rights. By issuing shares without voting rights, Meta can increase its capital stock and raise funds while avoiding a corresponding dilution of Zuckerberg's voting control.

However, maintaining control over voting rights does not mean that ordinary shareholders will not experience dilution. Whether it is this issuance of Class A common stock, future conversions of preferred stock, or next year's issuance of Class C stock, all of these could increase the total number of shares, thereby diluting the economic interests and earnings per share of existing shareholders.

IV. Core Impacts: Enhanced financing capability, but concurrent increase in equity dilution and pressure on investment returns for AI

The impact of this financing on Meta is mainly reflected in two aspects.

Firstly, large-scale equity financing can provide financial support for the continuously expanding capital expenditures of AI, reducing the company's reliance on internal cash flows and debt financing. The intention of NVIDIA, AMD, and Broadcom to participate in the subscription also indicates that major AI chip suppliers may further deepen their business relationships with Meta through equity investments.

Secondly, as Meta may raise tens of billions of dollars through multiple rounds of financing, the potential dilution risk faced by existing shareholders further increases. The establishment of new shares without voting rights can protect Zuckerberg's control, but it cannot eliminate the impact of additional share issues on economic equity per share.

Therefore, the core issue that the market needs to assess next is whether Meta can drive revenue and profit growth by adding new AI computing power, and achieve returns sufficient to cover the huge capital investment and the cost of equity dilution.

In terms of stock prices, Meta closed at $642.62 last Friday, a decrease of 0.96%; on October 26th, before the market opened, it further fell by about 1.34% to $634.