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Meta Platforms (Nasdaq: META) just launched the largest stock sale in its history.
It’s the latest sign that big tech giants are preparing for the next phase of the AI revolution. And it could make AI chatbot and AI agents completely insignificant.
Get the full story here – plus my top 5 stocks to buy now.
The reason comes down to a race for capital, and an AI product most investors hadn’t heard of this summer.
On Monday, Meta announced $35 billion in new equity: $22.5 billion of common stock and $12.5 billion of mandatory convertible preferred shares. A second program to sell up to $60 billion more will follow once Meta’s new non-voting Class C shares start trading early next year.
That totals up to roughly $95 billion.
Google, Nvidia and Tesla are also investing billions in the third phase of the AI revolution. Go here for urgent details.
This is a big shift. Meta hasn’t sold new shares since 2013, when it raised about $1.5 billion. For years, its ad business paid for everything.
That business is still thriving.
Third-quarter revenue hit $64.6 billion, up 26% from a year ago. But Meta plans to spend $135 to $145 billion this year on data centers, chips and power. In Q3, capital spending topped operating cash flow.
So why now?
Meta said in a filing that it’s prudent to raise money before other companies absorb the available capital. Alphabet (Nasdaq: GOOGL) raised $85 billion in June. And Anthropic is preparing for an IPO as soon as mid-November that could raise over $100 billion.
Meta wants to raise capital ahead of the Anthropic offering.
Much of that spending supports Muse, Meta’s new personal AI agent.
More than 10 million people in the U.S. and Canada set up Muse in about six weeks. Shopping is the top use, with over 25% of weekly users buying through it.
On October 12, Meta also released Muse Wonder, its most advanced model. It’s available with both $20 and $100 monthly subscriptions. Zuckerberg says Muse could eventually earn more per user than Facebook and Instagram, which already bring in several hundred dollars per American user each year.
That’s a new revenue stream beyond advertising. And it requires enormous computing power.
The chipmakers see it too. Nvidia (Nasdaq: NVDA), AMD (Nasdaq: AMD) and Broadcom (Nasdaq: AVGO) plan to buy a combined $5 billion of Meta stock in this deal.
The most profitable tech companies in the world have outgrown self-funding. Alphabet and Meta alone are raising about $180 billion in equity this year to keep building.
Meta shares are flat Monday and down 14% over the past month. That kind of pullback is common ahead of a large offering. Once the deal prices, much of that overhang goes away.
Income investors also get a new option. The convertible preferred will trade under the ticker METAM and is expected to yield 6% to 6.5%.
The AI buildout isn’t slowing down. Meta just raised the money to keep pace.
Are you invested for the next phase of the AI boom? Because an entirely overlooked group of tech stocks are quietly positioned for the next big breakthrough.
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Ian Wyatt
Editor, Daily Profit