Meta's stock sinks on report company could raise tens of billions of dollars to fund AI push

Meta's shares experienced a significant drop of over 5% on Friday, following a report from the Financial Times indicating that the company may consider raising tens of billions of dollars through a stock offering to bolster its artificial intelligence investments. The news comes in the wake of rival Alphabet's announcement this week regarding its plan to raise $85 billion from equity sales, an increase from an earlier target of $80 billion. As investors express concerns over the sustainability of massive AI expenditures, Meta has yet to engage banks or confirm any plans for a stock issuance. A spokesperson for the company dismissed the report as "pure speculation," emphasizing that Meta is focused on exploring flexible capital-raising methods to seize opportunities in the AI sector. Similar to its tech counterparts, both Meta and Alphabet are investing unprecedented amounts into capital expenditures to build AI infrastructure, driven by what they perceive as relentless demand. Earlier this year, Meta revised its 2026 capital expenditure forecasts upward, increasing the anticipated total to as high as $145 billion from a prior estimate of $135 billion. Meanwhile, Alphabet also elevated its capex guidance, raising it by $5 billion to a total of $190 billion. The contrasting performances of Wall Street towards these two tech giants have been notable, particularly due to Alphabet's flourishing cloud business, which lends credibility to its substantial spending. Over the past year, Alphabet's stock has surged more than 115%, outperforming its major competitors, while Meta's stock has declined by 13%, marking it as the least successful among its peers.