Meta Platforms (META) shares swung between losses and gains on Monday after the company announced a $35 billion stock offering to fund artificial intelligence projects, alongside plans for a separate share sale program worth up to $60 billion in 2027.

The stock fell nearly 2% in early trading before turning slightly positive by late morning, following last week's decline. Although shares recovered from their early losses, they remain below levels seen before the earnings sell-off, and rising AI infrastructure costs remain a concern for investors.

Meta Shares Recover as Company Plans Stock Sale

Meta plans to offer $22.5 billion in Class A common shares and $12.5 billion in securities linked to convertible preferred stock. The company expects to use the proceeds for general corporate purposes, including its AI expansion. Because the sale adds new shares to the market — and securities tied to convertible preferred stock can convert into common shares — it enlarges Meta's share count, dilution effect investors weigh against the capital raised.

It separately plans a share sale program worth up to $60 billion after its new nonvoting Class C stock begins trading in early 2027. Meta has not finalized that program, and its actual fundraising could fall short of the stated maximum. As the name indicates, nonvoting shares carry no votes, so the Class C structure allows Meta to raise capital from public trading without adding votes to its shareholder register.

Chipmakers Nvidia, AMD and Broadcom have expressed interest in buying up to $5 billion of Class A shares combined, which would make the three suppliers direct shareholders in Meta. Their proposed participation comes as Meta builds more data centers and expands its computing capacity to support its AI ambitions.

Quarterly Revenue Growth Meets Higher AI Costs

Meta reported third-quarter revenue of $64.6 billion, up 26% from a year earlier. Stronger advertising sales and the company's new Muse AI models were highlighted in a report on Meta's earnings.

The company earned $3.83 per share under standard accounting rules. Excluding a $9.89 billion legal settlement charge, earnings would have reached $7.40 per share. Fourth-quarter revenue guidance stands at $73 billion to $76 billion.

Meta set its full-year capital spending forecast for 2026 at $135 billion to $145 billion. Third-quarter spending reached $34.91 billion, while free cash flow fell to negative $2.12 billion, compared with positive cash flow in the year-ago period — a quarter in which outlays exceeded cash generation, making the $35 billion raise a source of funding beyond what operations produced.

Analysts Assess Meta Shares and AI Funding

Piper Sandler analyst Thomas Champion said Meta's fundraising plan could reduce uncertainty about financing. His firm maintains an Overweight rating on the stock and an $850 price target. Bank of America, meanwhile, retains a Buy rating and an $845 target. Near-term markers for the debate are already set: fourth-quarter results against the $73 billion to $76 billion guidance, and the final terms of the 2027 share sale program, which remain unfinalized ahead of the Class C listing planned for early 2027.

Other technology companies continue expanding computing facilities. Applied Digital's Texas data center agreement, for instance, involves a 51% stake in a planned 50-megawatt project, showing continued investment across the sector. Meanwhile, Hyperscale Data's Michigan AI project targets initial operations in December. Its expansion reflects the broader race to secure computing capacity, even as Meta investors question rising costs.

This article was originally published on Blockonomi.