Meta stock drops after report says company weighs AI funding share sale

Shares of Meta Platforms fell sharply on Friday after a report suggested the social media giant is exploring a potential multibillion-dollar stock offering to help finance its growing artificial intelligence ambitions.

META shares dropped more than 5% during the session, with losses accelerating after the Financial Times reported that the company is considering raising tens of billions of dollars through an equity sale.

The report said executives have been examining "creative" financing options as AI-related spending continues to rise.

The company has not hired investment banks and may ultimately decide against issuing new shares.

A person familiar with the discussions told the Financial Times that it was "premature" to conclude that Meta had settled on a financing strategy and that all options remain under consideration.

A Meta spokesperson dismissed the report, calling it "pure speculation."

"We’ve been clear that huge opportunities lie ahead in AI, and we’ll continue focusing on raising capital in the most flexible ways to support that," the spokesperson said in an email.

AI spending plans drive financing discussions

Meta, like several of its largest technology peers, has been significantly increasing capital expenditures as it races to build the infrastructure needed to support advanced artificial intelligence models.

In April, the company raised its 2026 capital expenditure guidance to as much as $145 billion, up from a previous forecast of up to $135 billion.

The Financial Times reported that spending could climb even higher in 2027 as Chief Executive Officer Mark Zuckerberg pursues his vision of delivering "personal superintelligence" across Facebook, WhatsApp, Instagram, and a growing lineup of AI-powered wearable devices.

According to the report, Chief Financial Officer Susan Li is leading discussions around a potential equity raise alongside Meta president Dina Powell McCormick, who took on a more active executive role earlier this year after serving on the company's board.

People familiar with the discussions said Meta has studied the structure of Alphabet's recently announced $85 billion equity offering, which included a mandatory convertible preferred security that raises cash immediately while delaying the issuance of common stock.

The discussions come as US equity capital markets experience a surge in activity, with SpaceX preparing for a public listing and AI companies Anthropic and OpenAI also reportedly working toward major market debuts.

Wall Street weighs AI investment costs

The prospect of additional equity financing highlights the enormous capital requirements facing large technology companies as they expand AI infrastructure.

Meta has already tapped debt markets in recent months.

According to the Financial Times, the company, which had less than $10 billion in long-term debt as recently as 2022, has borrowed roughly $55 billion through multiple financing transactions.

One of those included a $27 billion bond deal tied to a joint venture with private capital firm Blue Owl to help fund the construction of a large data center project in Louisiana.

The company has also sought to preserve cash through other measures.

It halted its share repurchase program in late 2025 after buying back stock regularly since 2017, while also reducing costs through workforce cuts and a hiring freeze affecting thousands of positions.

Investor reactions to AI spending have varied across the technology sector.

Alphabet's shares have gained more than 115% over the past year, supported by strength in its cloud business, while Meta stock has fallen about 13% over the same period despite its aggressive AI expansion plans.

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