Meta priced its biggest stock sale ever on Oct. 271. The total reached $37.5 billion, split between new common stock and preferred shares. Meta wants the cash for the data centers that run its AI push. Nvidia, the company that sells Meta the chips those centers run on, bought part of the sale4.
Morgan Stanley and Goldman Sachs ran the sale1. New shares price at $625 each, and preferred stock pays holders 6.5 percent a year. Settlement lands Oct. 29.
Meta Prices Its Biggest Sale Ever
The common stock piece totals $25 billion1. That is 40 million shares at $625, with room for underwriters to buy 6 million more. Preferred shares add $12.5 billion more, sold as 250 million depositary shares at $50 each. Together, before any overallotment, the two pieces complete the sale Meta priced this week.
This week's sale is only part of a larger plan. Meta also wants to run a $60 billion at-the-market stock program once its new nonvoting Class C shares start trading. That start is expected in early 20274. Its full AI financing plan, once that program launches, reaches roughly $97.5 billion.
Equity Over More Borrowing
Meta had reasons to avoid more borrowing right now. Its free cash flow turned negative in the third quarter: a $2.12 billion deficit3. A year earlier, the same quarter produced $10.6 billion in positive free cash flow.
Meta's free cash flow flips from plus $10.6 billion to minus $2.1 billion in a year
Quarterly free cash flow, Meta's third quarter of 2025 against its third quarter of 2026, billions of dollars
Each column is one quarter's free cash flow: the 2025 column sits in the positive, and the 2026 column drops into the negative, the first quarter like that since 2012.
Source: Meta Platforms, Inc. [3]. Chart by Ryan Elliott Dennis.
The numbers behind this chart
| Item | Value |
|---|---|
| Q3 2025 | $10.63B |
| Q3 2026 | −$2.12B |
Capital spending drove the swing. Meta spent $33.9 billion on servers and data centers alone. Revenue still grew, advertising included. The core stayed healthy, while the AI bill grew even faster.
Lenders noticed the gap. Meta has now committed roughly $825 billion to future data center leases and compute contracts, up from $700 billion in July2. Insuring five years of Meta's debt against default jumped to a record price this month7. Borrowing more, at that price, costs more too.
Chief Financial Officer Susan Li declined to name a number for next year. "We aren't providing a specific outlook for 2027 capex at this time," she told analysts on the earnings call3. Chief Executive Mark Zuckerberg struck a different note the same day. "Our investments are paying off, the core business is strong, and we're seeing velocity across the board," he said.
The Chipmakers Buying Into Their Own Customer
Wall St Engine@wallstengine$META announced plans to raise approximately $35 billion through two offerings:
> $22.5B in Class A common stock through forward sale agreements.
> $12.5B in depositary shares representing mandatory convertible preferred stock.
Interestingly, NVIDIA, AMD and Broadcom have… pic.twitter.com/zBQpn3ogXM
Nvidia agreed to put $3 billion into the new shares4. AMD and Broadcom together floated interest in up to $2 billion more, short of a signed deal. All three sell Meta the chips its data centers need.
That overlap matters for a budget question. A supplier's money works differently from an ordinary investor's. Some of it can return to the supplier itself, as revenue for the hardware that cash was meant to buy.
Nvidia, AMD and Broadcom's combined offer covers about 13 percent of the $37.5 billion priced. The rest, roughly $32.5 billion, comes from ordinary investors buying the stock on its own terms.
Chipmakers offer to buy $5 billion of the $37.5 billion Meta priced for AI
Where Meta's Oct. 27, 2026 stock and preferred offering money comes from, in billions of dollars
The flow runs from the full $37.5 billion raised to the three places it comes from: Nvidia's own commitment, AMD and Broadcom's combined interest, and every other investor who bought in.
Nvidia, AMD and Broadcom's interest still falls short of a signed deal, so the final split could move before the sale settles Oct. 29.
Sources: U.S. Securities and Exchange Commission [1]; Reuters, via Investing.com [4]. Chart by Ryan Elliott Dennis.
The numbers behind this chart
| Item | Value |
|---|---|
| Nvidia | $3B |
| AMD and Broadcom | $2B |
| Other investors | $32.5B |
| Whole | $37.5B |
Morgan Stanley and Goldman Sachs collect underwriting fees for the sale, paid from the proceeds before Meta sees the cash1. That is who gets paid first. Meta gets the rest, for chips, buildings and power.
Two Reads on the Same Raise
Scott Galloway co-hosts the podcast Prof G Markets. He named Meta this week as the AI boom's likely winner. Meta "has the biggest moats, has the capital to engage in this arms race," he said5. "I hate to admit it, it's Mark Zuckerberg and Meta right now," he added.
On his read, a company that can raise $37.5 billion this easily has already settled the argument over whether to spend it. Torsten Slok, chief economist at Apollo Global Management, reads the wider AI spending boom differently. He argues the payoff so far sits almost entirely inside a handful of companies. "The AI story will be decided in the S&P 493, not the Mag 7," he wrote6.
Meta sits inside that handful for now, and this week's raise bets it stays there.
What to Do
Separate the two numbers before repeating either one in a budget meeting. The $37.5 billion priced this week is real money, mostly from ordinary investors. On its own, that fact falls short of proof that the chip trade runs in a closed circle. Its chip-supplier slice, about 13 percent, is real too, small enough to leave most of the raise unexplained.
Watch Meta's own capex guidance before taking either the bull or the bear case on faith. Susan Li's refusal to name a 2027 figure belongs in your own AI budget planning more than the headline total does.
By the Numbers
- $37.5 billion: the size of Meta's stock and preferred sale priced Oct. 27, before any overallotment1.
- $625: the price of each new Meta common share in the offering1.
- 6.5 percent: the annual dividend on Meta's new preferred shares1.
- $5 billion: Nvidia, AMD and Broadcom's combined interest in the new shares, short of a signed deal4.
- Negative $2.12 billion: Meta's free cash flow in the third quarter of 2026, down from positive $10.6 billion a year earlier3.
- $825 billion: Meta's committed future spending on data center leases and compute contracts, as of Sept. 302.
- 119.3 basis points: the record price this month to insure five years of Meta's debt against default7.
What to Watch
Watch whether Meta's $60 billion at-the-market program actually launches in early 2027, on schedule with its new Class C shares. A delay there would say more about investor appetite than this week's price did. Watch Meta's next capex guidance too. A real 2027 figure, once Susan Li gives one, will settle whether this week's raise was enough.
A second point worth tracking sits closer to home: Meta's own advertising revenue growth. That business, more than the chip suppliers, pays for most of this buildout on its own.
Sources
- Meta Platforms, Inc., "Meta Platforms, Inc. pricing term sheet (Free Writing Prospectus)," U.S. Securities and Exchange Commission, Oct. 27, 2026, https://www.sec.gov/Archives/edgar/data/0001326801/000119312526432549/d382225dfwp.htm
- Meta Platforms, Inc., "Meta Platforms, Inc. Form 10-Q for the quarter ended September 30, 2026," U.S. Securities and Exchange Commission, Oct. 22, 2026, https://www.sec.gov/Archives/edgar/data/0001326801/000162828026066773/meta-20260930.htm
- Meta Platforms, Inc., "Meta Reports Third Quarter 2026 Results," Meta Platforms, Inc., Oct. 21, 2026, https://investor.atmeta.com/investor-news/press-release-details/2026/Meta-Reports-Third-Quarter-2026-Results/default.aspx
- Jaspreet Singh, "Meta eyes record $97.5 billion equity raise to fund AI expansion," Reuters, via Investing.com, Oct. 27, 2026, https://www.investing.com/news/economy-news/meta-eyes-record-975-billion-equity-raise-to-fund-ai-expansion-4975360
- Roxanna Maglangit, "Scott Galloway Picks Meta as AI's 'Big Winner' as Its $35 Billion Raise Lifts the Stock," Yahoo Finance, via TIKR, Oct. 26, 2026, https://finance.yahoo.com/markets/stocks/articles/scott-galloway-picks-meta-ai-183723796.html
- Stocktwits News Desk, "Apollo's Torsten Slok Warns AI Has Delivered 'Zero Financial Payoff' Outside Tech — 'AI Story Will Be Decided In The S&P 493, Not The Mag 7,'" Yahoo Finance, via Stocktwits, Oct. 25, 2026, https://finance.yahoo.com/markets/stocks/articles/apollo-torsten-slok-warns-ai-125709125.html
- Caleb Mutua, "Meta Credit Risk Gauge Hits Fresh High on AI Spending Plans," Bloomberg, via Yahoo Finance, Oct. 22, 2026, https://au.finance.yahoo.com/news/meta-credit-risk-gauge-hits-125603234.html
- Wall St Engine (@wallstengine), post on X, Oct. 26, 2026, https://x.com/wallstengine/status/2114674538491564511