Meta Stock Falls 5.5% as Massive AI Funding Plan Emerges, June 08

Meta Platforms stock fell 5.5% to $593.00 on June 5 after reports emerged that the company is considering a massive stock sale to fund AI infrastructure. The potential offering could raise tens of billions of dollars. This move follows Alphabet’s $85 billion equity raise announced days earlier. Both companies are racing to secure capital for data center expansion as AI spending accelerates across the tech sector.

Stock Tumbles on Dilution Concerns

Meta’s share price dropped 5.5% to $593.00 on the news, with some intraday reports showing declines as steep as 7%. The stock is now down 8% year-to-date and 23% below its August 2025 peak of $796.25. Investor concern centers on shareholder dilution. When a company issues new shares, existing shareholders own a smaller percentage of the business unless the capital generates returns that exceed the dilution effect.

Following Alphabet’s Lead in AI Funding

Alphabet moved first with an $85 billion equity raise on June 1, which included a $10 billion commitment from Berkshire Hathaway. Meta would enter the market second, potentially into a less receptive environment. Unlike Alphabet, Meta has not yet secured underwriters for its offering, meaning the decision remains pending and contingent on market conditions. Both companies have earmarked proceeds for the same purpose: data center expansion and AI compute infrastructure.

Massive Capex Spending Fuels AI Ambitions

Meta’s capital expenditures are projected to total $125 billion to $145 billion in 2026 as the company builds infrastructure for AI. The company is pursuing what it describes as personal superintelligence across Facebook, Instagram, WhatsApp, and enterprise tools. Early returns from ad-ranking models are already materializing in improved conversion rates. However, the company also continues to lose money in Reality Labs, its augmented and virtual reality division.

Insider Selling and Mixed Analyst Views

Meta insiders have sold $127 million in stock over the past six months with zero purchases. CFO Susan Li sold 148,802 shares for $95 million, while COO Javier Olivan sold 31,490 shares for $20 million. Despite this selling pressure, analyst consensus remains strong. Meyka rates the stock B+ with a 12-month price target of $705.00, implying 19% upside from current levels. The stock trades at a forward P/E of 21.6, below its historical average, offering what some analysts view as an attractive entry point.

Final Thoughts

Meta’s potential stock offering signals that AI infrastructure buildout now depends on external capital and long-term contracts. With Meyka rating the stock B+ and analysts favoring the long-term outlook, the near-term dilution concerns may present a buying opportunity for patient investors.

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