Meta launches $35 billion in stock offerings to finance its AI buildout

Meta draws bullish analyst calls despite AI funding and cash-flow concerns

Meta’s AI financing push has not shaken three analysts’ bullish positions, even after investors sold its shares over spending and return concerns. Wells Fargo, RBC Capital Markets and Yorkville kept positive ratings, PYMNTS reported on October 26, while questioning the spending outlook and highlighting cash pressure. Their backing follows Meta’s plan to issue non-voting shares to help fund AI.

The financing mechanism separates raising money from granting voting rights. On October 21, Meta said it would issue a new class of Class C shares to fund AI spending and other priorities. Those shares carry no voting power. Selling stock would bring in investor money, but increase the number of shares outstanding—a source of pressure on share prices described in Business Day’s October 22 account.

PYMNTS, citing Seeking Alpha, put Meta’s planned equity financing at $95 billion. That is a reported fundraising plan, not money already raised. The earlier Business Day article described the proposed Class C issuance without attaching a dollar amount. Its account linked expectations of further stock sales to higher interest rates after technology companies borrowed heavily for AI investment.

Alongside the share plan, Meta increased the minimum it expects to spend this year. The lower end of its annual forecast rose from $130 billion to $135 billion, while the upper end stayed at $145 billion. The revision narrows the range upward rather than lifting its ceiling.

Meta’s cash generation had already moved sharply in the opposite direction. Third-quarter free cash flow was negative $2.12 billion, against positive $10.63 billion a year earlier. It was the company’s first cash burn in more than a decade. That leaves the financing proposal arriving alongside both a higher spending floor and a reversal in cash flow.

Shares fell 8% on October 22, their largest drop since July. The selling extended across companies tied to the AI buildout: Nvidia declined 4%, while CoreWeave fell 9%. The moves reflected investor anxiety about the cost of expansion and how long returns might take, rather than a concern confined to Meta’s proposed share structure.

Matthew Maley, chief market strategist at Miller Tabak, identified return on investment as the central question. “It’s just becoming more and more evident to people that it’s going to take a lot longer,” he said. Dakota Wealth senior portfolio manager Robert Pavlik likewise cited more spending, negative free cash flow and insufficient revenue from that spending as investor concerns.

The subsequent analyst reactions show that a favorable view of Meta can coexist with doubts about the bill. According to PYMNTS’ account of Seeking Alpha’s reporting, each firm retained its positive rating, but emphasized a different concern:

Wells Fargo maintained Overweight and a $995 price target, while expressing uncertainty about Meta’s spending next year.

RBC Capital Markets maintained Outperform and an $800 target, noting that investors want returns from potentially higher capital spending.

Yorkville maintained Outperform and a $920 target, while pointing to the third-quarter turn to negative free cash flow.

Meta’s stated investment rationale includes business customers, not just consumer services. It sees an opportunity to serve what it calls “high-margin inference demand” through its Meta Enterprise platform and advanced models. Inference means running models to produce outputs. That is Meta’s expectation of a commercial opportunity; the analysts’ reservations concern the spending and returns needed to make the investment pay.