Meta reported negative $2.12 billion in third-quarter free cash flow as capital spending outpaced cash generated by operations, underscoring the financing demands of its AI expansion and the potential cost to shareholders of issuing new stock.
Capital expenditures, including principal payments on finance leases, reached $34.91 billion for the quarter ended Sept. 30, compared with $32.79 billion in operating cash flow. Revenue rose 26% from a year earlier to $64.60 billion.
Meta forecast capital expenditures of $135 billion to $145 billion for 2026, including finance-lease principal payments. The company narrowed the previous range’s lower end from $130 billion and said work on its 2027 budget and capacity plans was continuing.
A proxy statement filed Oct. 21 recounts advisers’ account that management told them three scenarios presented to Meta’s board in May pointed to a need to raise hundreds of billions of dollars over several years, starting as early as fall 2026. The filing describes a potential financing need, not a completed or committed transaction.
Meta’s board approved a publicly listed, non-voting Class C share class that takes effect in January 2027. The company said it could use the shares to raise capital, compensate employees, make acquisitions and for other corporate purposes. The filing says future issuance could dilute shareholders’ economic interests. Meta has also said AI investments are contributing to advertising through engagement, recommendations and more efficient monetization, while some newer opportunities will take longer to produce returns.
CoreWeave’s June 30 filing details the financing obligations of another AI infrastructure builder. The company listed $35.551 billion in scheduled principal payments, including $4.413 billion for the rest of 2026. Net interest expense for the first six months of 2026 was $1.176 billion, compared with $531 million in the same period a year earlier. CoreWeave said cash and borrowing capacity would cover obligations due or expected within a year of the filing.
Nvidia CEO Jensen Huang told CNBC on Oct. 22, “The demand of the capital is much greater than the availability of the capital.” CNBC also reported that its Investing Club bought 10 shares of GE Vernova on Oct. 22, then sold Broadcom and trimmed CrowdStrike the next day. The Club said the sales followed average gains of about 128% and 187%, respectively, and described the CrowdStrike trim as position sizing rather than concern about the company’s fundamentals.
Federal Reserve Economic Data closing series show the S&P 500 fell 0.5% and the Nasdaq Composite declined 0.7% for the week ended Oct. 23, while the Dow Jones Industrial Average rose 0.4%. Meta’s fourth-quarter revenue forecast is $73 billion to $76 billion; the company has not provided a 2027 capital expenditure forecast.
