Meta prices $37.5 billion of stock for AI, with $12.5 billion due this week

Meta Platforms priced $37.5 billion of stock on Monday to help pay for artificial-intelligence spending it expects to reach $135 billion to $145 billion in 2026. The cash the company collects this week is about $12.5 billion.

In the filing that launched the sales, Meta said the offerings support its continued investment in AI infrastructure and in what it calls personal superintelligence. It plans to pay for that spending with operating cash flow, debt, partnerships and equity.

What arrives Thursday is a preferred stock sold at $50 a share. It pays a 6.5% annual dividend and converts into common shares by August 2029. The sale raises $12.5 billion, and after underwriting fees Meta still expects to receive about $12.5 billion.

The $25 billion waits until 2027

The rest is common stock, priced at $625 in an offering enlarged from $22.5 billion, Meta said in its pricing announcement. That price is 0.9% below Monday’s close of $630.56.

Meta does not receive the money when those shares are sold to the public. Under forward contracts with Morgan Stanley Capital Services and Goldman Sachs & Co., it expects about $24.9 billion before expenses, on one or more dates it chooses on or before Nov. 19, 2027.

Both sales are scheduled to close Thursday, and neither depends on the other. Only the preferred pays Meta that day.

Just after 7 a.m. ET, Meta’s premarket bid was $629.70, 0.1% below Monday’s close and above the $625 sale price.

Nvidia said Monday it will invest $3 billion in Meta’s equity offering as the two expand work on Muse, Meta’s family of AI models and agents. Nvidia’s release calls the stake a proposed investment, still subject to closing.

Meta has also said it plans to sell about $60 billion more, in a new class of common stock, into the market over time. No agreement is in place, and the company does not expect those sales to start before the first quarter of 2027.

Lenders commit $63 billion for the chips

Bank of America, Blackstone, Citi and Morgan Stanley said Monday they had committed $63 billion to buy Broadcom’s AI chips and networking equipment and lease them to Anthropic, which develops AI models. The purchase will run through a new company. Deliveries are expected to start in 2027, the firms said in the announcement.

The Wall Street Journal described the deal as the biggest ever to raise money for AI infrastructure. The financing and Meta’s stock sale are two ways the AI buildout is being paid for.

Economists expect a December rate increase

The U.S. Federal Reserve’s two-day meeting begins today. The rate decision and Chairman Kevin Warsh’s press conference are Wednesday.

In a Reuters poll of 100 economists, taken from Oct. 16 to 20, 94 expected the Fed to hold its target range at 3.75% to 4% this week. All 100 expected an increase in December. Fewer than half had expected a December increase in the September poll. The Fed raised rates by a quarter point that month, in a unanimous vote.

The Wall Street Journal reported this morning that Warsh wants to stop previewing coming moves. Several colleagues, the Journal wrote, say the Fed owes the public an explanation of how it will respond to the economy.

Reuters reported this morning that Wall Street already treats this week’s hold as settled. Bond investors, it wrote, are thinking less about the Fed and more about AI and deficits.

Semiconductor funds are up before the open

Just after 7 a.m. ET, premarket bids were 0.3% above Monday’s close for the State Street SPDR S&P 500 ETF ASPY, at $767.90, and 0.5% above for the Invesco AQQQ Trust, Series 1 AQQQ, at $715.86. The premarket bid on the iShares Semiconductor ETF ASOXX was $499.66, 1.6% above Monday’s close of $491.83, after the fund rose 2.9% on Monday.

September durable-goods orders are due at 8:30 a.m. ET. The Conference Board’s consumer confidence survey and September new-home sales follow at 10 a.m. ET.