Meta's shares experienced a significant decline after the Financial Times reported that the company might consider raising tens of billions of dollars through a stock offering to support its artificial intelligence initiatives.
This speculation comes in the wake of Alphabet's announcement to increase its equity raise from $80 billion to $85 billion, highlighting the competitive landscape in AI investments. Despite the report, a Meta spokesperson dismissed the claims as 'pure speculation,' emphasizing the company's commitment to exploring flexible capital-raising options for AI opportunities.
Both Meta and Alphabet are heavily investing in AI infrastructure, with Meta recently raising its capital expenditure guidance for 2026 to as high as $145 billion. In contrast, Alphabet's stock has surged over 115% in the past year, bolstered by a strong cloud business, while Meta's stock has declined by 13%, making it the worst performer among major tech companies.
This divergence in stock performance reflects investor concerns about Meta's ability to justify its spending in the absence of a robust revenue stream comparable to Alphabet's