Meta Is Selling Up to $95 Billion of Stock. Its Chip Suppliers Want In
Meta just broke a 13-year silence on new stock, and the chip suppliers powering its AI ambitions are lining up to buy in. Whether that signals genuine confidence or a circular bet worth billions depends on what gets priced next.
Before the opening bell on October 26, 2026, Meta Platforms (NASDAQ:META | META Price Prediction) launched a financing plan of up to $95 billion to pay for its AI build-out. It is the company’s first sale of new stock since 2013, and three of its chip suppliers have asked to take part.
NVIDIA (NASDAQ:NVDA), AMD (NASDAQ:AMD) and Broadcom (NASDAQ:AVGO) indicated interest in buying up to $5.0 billion of the common shares, at the same price and on the same terms as other buyers. Those indications are not binding, so each company may buy more, fewer, or no shares.
Meta rose 1.6% in premarket trading, fell as much as 4%, and closed down 1.88% at $630.56. That left it with a market value of $1.39 trillion, and the stock traded at $632.00 after hours. NVIDIA rose 2.39% to $216.00, AMD gained 2.80% to $531.28, and Broadcom added 2.33% to $329.17.
What Meta Committed To Versus What It Only Plans
The committed part is about $35 billion of underwritten issues, laid out in Meta’s SEC filing. It includes $22.5 billion of Class A common stock sold through forward sale agreements and 250 million depositary shares, worth about $12.5 billion, tied to new mandatory convertible preferred stock. Underwriters can add $3.375 billion of common stock and 37.5 million depositary shares.
The other $60 billion is a planned at-the-market program, meaning Meta will sell Class C shares gradually into the market. It is not expected to start before the first quarter of 2027, and Meta has no agreement for it and no assurance it will happen.
Meta receives cash only at settlement. It can settle the forward sales on dates it chooses through November 19, 2027, which lets it decide when the dilution hits.
The preferred has a $1,000 liquidation preference ($50 per depositary share) and converts automatically around August 15, 2029. Barron’s expects a yield of 6% to 6.5%.
Why the Chipmakers Rose While Meta Fell
Investors treated the raise as a signal of more chip orders. NVIDIA has a multiyear deal for Meta to use “millions” of its GPUs, and Broadcom expects to use 3 gigawatts of Meta’s custom chips through 2028.
AMD is the most exposed to Meta among the three suppliers. On February 24, 2026, it agreed to supply 6 gigawatts of MI450 chips in a deal the Associated Press said could be worth more than $100 billion. As part of that deal, AMD gave Meta a warrant for up to 160 million AMD shares.
The suppliers’ indication matches about 22% of the common issues. Critics call this circular financing because the suppliers would be funding a customer that then pays them back in orders.
Why Meta Needs Outside Money Despite Strong Cash Flow
Meta generated $97 billion of operating cash flow in the first three quarters and held about $82 billion of cash and securities. But it expects $135 billion to $145 billion of 2026 capital spending, and third-quarter free cash flow was negative $2.12 billion.
Third-quarter revenue rose 26% to $64.6 billion, with net income of $9.9 billion. Raising equity covers the gap without adding debt that could put pressure on its credit ratings.
The prospectus based its share math on the October 23 close of $642.62 and 2,214,455,318 Class A shares. StockTitan estimates the full plan at about 148 million share equivalents, or roughly 5.5% dilution. The Class C program is likely to remain a concern for shareholders into 2027 even if Meta never uses it.
What Meta’s Valuation Says About the Raise
Meta trades at about 23 times earnings, compared with 43 for NVIDIA, while growing revenue 26%. Investors will consider the estimated dilution against the fact that Meta’s own suppliers want its shares.
Broadcom has less direct exposure to the dilution. It takes in Meta’s spending without diluting its own shareholders, and it turned 46% of revenue into free cash flow in its fiscal third quarter.
The test is the pricing of both issues, which has not been scheduled yet. If the preferred yield prices above the top of the expected range, or the final prospectus shows the chipmakers bought well under $5.0 billion, demand was weaker than the headline suggested, and a Meta close below $630.56 would reinforce that reading.
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