Meta Raises USD 35B Equity to Fund USD 145B Capex

Meta launched a public offering of about USD 35 billion on 26 October, split between roughly USD 22.5 billion of Class A common stock and about USD 12.5 billion of depositary shares representing mandatory convertible preferred stock, with 250 million depositary shares each representing one twentieth of a preferred share. The company also said it intends to start an at-the-market programme of up to USD 60 billion once its new non-voting Class C shares begin trading in the first quarter of 2027.

Three chipmakers signalled interest in the paper. Nvidia, AMD and Broadcom have indicated they may buy up to USD 5 billion of Class A shares between them, a non-binding expression of intent rather than a commitment. That detail is worth noting on its own: when suppliers of the hardware being purchased also buy equity in the buyer, the arrangement functions as vendor financing, and it changes the incentives on both sides of a purchase order.

The balance sheet explains the urgency. At 30 September Meta held about USD 82.45 billion in cash, equivalents and marketable securities against USD 80.92 billion of long-term debt, and total future commitments have risen to about USD 825 billion from roughly USD 700 billion in July. Third-quarter revenue was USD 64.6 billion, up 26 percent, with net income of USD 9.9 billion, and operating cash flow for the first nine months was USD 97 billion, but free cash flow turned negative for the first time as capital expenditure climbed toward the guided USD 135 billion to USD 145 billion for 2026.

For suppliers, equity-funded capex is a different credit profile from debt-funded capex. It avoids interest cost and covenant pressure, but it depends on the share price staying high enough to issue into, and it can be paused quickly if the market turns. Suppliers with long tooling lead times should confirm that purchase commitments survive a financing pause, and should avoid accepting payment terms that stretch past the point where the next equity raise is expected.

There is also a concentration issue. A single customer committing USD 825 billion does not spread demand evenly: it pulls specific rack designs, specific optical speeds and specific cooling architectures, and it can strand capacity when a generation changes. Buyers of the same components should keep a documented second source.

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