Meta Platforms has lost nearly $400 billion in market value since late September and launched a $35 billion share offering on October 26 to fund its artificial intelligence buildout. The fundraising comes as third-quarter free cash flow turned negative and long-term debt rose. Wall Street analysts’ average price target remains about 1.4 times the current share price, leaving investors to weigh funding needs and dilution against the returns from AI spending.
AI spending pushes free cash flow below zero
Meta spent $34.9 billion on data centers, chips and other equipment in the third quarter. After those outlays, free cash flow was negative $2.12 billion, compared with positive $10.6 billion in the same period a year earlier. The shift highlights the growing cash demands of building AI infrastructure and helps explain the company’s decision to raise funds through a share offering.
Issuing shares increases the number of shares outstanding. If profit growth does not keep pace, existing shareholders will own a smaller proportion of the company’s earnings. The offering therefore puts the focus not only on Meta’s ability to continue its AI investment, but also on how efficiently it deploys the new capital and what that means for shareholder returns.
Debt rises as buybacks pause
Meta reported $80.9 billion in long-term debt at the end of the third quarter, up from $58.7 billion at the end of 2025. The company did not repurchase shares during the quarter, while its operating margin fell to 20%, roughly half its previous level. A $9.89 billion legal expense was a significant factor in the margin decline; the available information does not specify the details of the related settlement.
The figures point to several pressures on Meta’s finances: higher AI-related capital spending, negative free cash flow and increased long-term debt. The legal expense also weighed heavily on quarterly margins. Assessing the operating trend requires distinguishing that expense from ongoing infrastructure investment, rather than drawing conclusions from the margin change alone.
Analysts remain positive, but targets vary
Despite the steep decline in market value and the planned share sale, analysts overall maintain a “Buy” rating on Meta, with an average price target around 1.4 times the current share price. At least one analyst has set a target below the current price, however, underscoring that views are not unanimous. Price targets reflect analysts’ assessments and do not guarantee where the shares will trade.
Investors will be watching how the $35 billion offering affects existing shareholders’ ownership stakes and whether Meta can generate operating returns that support its AI spending. The company’s disclosed quarterly figures—$34.9 billion in capital expenditure, negative $2.12 billion in free cash flow, $80.9 billion in long-term debt and a 20% operating margin—offer concrete measures to track its funding needs and investment pace.