META changes
Pick any two versions below to diff them.
- Price
- $641.39 → $628.77(−2.0%)
- Risks
- Meta's AI spending is now outrunning the cash the business generates. Free cash flow was negative $2.12 billion in Q3 2026, as capital spending with finance lease payments reached $34.91 billion, and Meta bought back no shares in the first nine months of 2026. Meta also builds data centers through partner ventures that borrow at high cost, such as the El Paso venture, whose bonds priced at a yield near 7.5%. Meta guarantees part of the value of these data centers. If AI products do not generate enough revenue soon, this financing could keep getting more expensive. Meta depends on advertising for almost all of its revenue. A slowdown in the ad market would hit Meta harder than a more diversified company. Meta One, its first real subscription revenue stream, is still new and unproven at scale. Meta keeps facing costly legal cases. In a New Mexico child-safety case, a jury and a judge ordered Meta to pay about $942 million in 2026. In a second New Mexico case, a jury found more than 43 million violations, and on October 21, 2026, a judge set a civil penalty of $25 billion with 15% interest after judgment. Meta will appeal, and it may have to post a bond during the appeal. Meta also agreed to pay $12.7-18 billion over 10 years to settle claims from 52 attorneys general. Thousands of individual lawsuits over teen harm are still pending in federal court. removed: In September 2026, Goldman Sachs estimated that added: Meta spends heavily on AI removed: hyperscalers, including Meta, may need roughly $1 trillion a year in AI-driven added: before the revenue removed: to earn a strong return added: comes. It guided 2026 capital expenditures, including principal payments on removed: current AI spending, versus about $300 added: finance leases, to $135-145 billion, against $72.2 billion removed: a year just added: in 2025, and in Q3 2026 its capital spending of $34.91 billion was more than its operating cash flow of $32.79 billion. Meta said that its AI investments will take longer to removed: break even. added: earn returns than those in its core business, and that it will keep investing aggressively in 2027. If AI revenue removed: across the industry falls short of that, added: grows more slowly than this spending, investor patience removed: with Meta's own spending could added: can run out. Meta competes for AI talent and AI infrastructure capacity with well-funded rivals. Its AI products are new, and a research firm said in October 2026 that Muse downloads were falling.
- Balance sheet
- Cash: $82.5B Debt: $84.0B Net debt: $1.6B Interest cover: 24× Debt due within 12 months: $2.7B Last debt due: 2066 Ratings: Moody's Aa3 (stable outlook), S&P AA- (stable outlook) Meta borrows more each year to build data centers, but its reported debt is still small next to its profit. Its larger obligations are off the balance sheet. At September 30, 2026, signed leases that had not started totaled $355.7 billion, up from $279 billion at June 30, 2026. Debt is fixed-rate senior unsecured notes at the parent. This includes $25.0 billion that Meta issued in May 2026, with coupons up to 6.45%. The $2.75 billion of notes due in 2027 are the only notes due within 12 months. Interest cover is operating income divided by interest expense for the first nine months of 2026, and the $9.89 billion legal charge of Q3 2026 lowers it. Meta owns 20% of two unconsolidated data center ventures, in Louisiana and in El Paso, Texas. Its maximum loss in them is $68.4 billion, which includes residual value guarantees of $41.5 billion. The balance sheet already shows $31.2 billion of operating lease liabilities. These structures let Meta build without much more reported debt. But they act like debt if the data centers lose value or Meta stops using them. In the first nine months of 2026, capital expenditure of $83.1 billion took most of the $96.9 billion operating cash flow. Meta bought back no shares in that period. In October 2026, Meta said it will create a non-voting Class C stock in January 2027 and that it can use it to raise capital. Unless AI revenue grows, more spending will need more borrowing, partner money or new shares. added: After September 30, 2026, Meta added $15.0 billion of dollar notes (closed November 5) and €9.0 billion of euro notes (interest from November 12), so the debt figures here do not include them. It also sold about $14.4 billion of mandatory convertible preferred stock and 46 million Class A shares through forward sale agreements. As of Sep 30, 2026.
- Recent events
- added: Nov 6, 2026: Meta raised more money in early November 2026. On November 5, it closed an offering of $15.0 billion of senior notes in five parts, with coupons from 5.850% on notes due 2031 to 7.500% on notes due 2056. A prospectus supplement of November 6 added €9.0 billion of euro notes in six parts, with coupons from 4.300% to 6.400% and maturities from 2031 to 2065, which pay interest from November 12. On November 2, Meta also issued 37.5 million more depositary shares of the mandatory convertible preferred stock, for net proceeds of about $1,869 million, so the preferred stock now totals about $14.4 billion. On November 4, the banks used their full option, and Meta signed forward sale agreements for 6 million more Class A shares, which brings the forward sales to 46 million shares. Oct 26, 2026: Meta sold 40 million Class A shares at $625 per share, or $25.0 billion, through forward sale agreements that settle by November 19, 2027. It also sold $12.5 billion of 6.50% mandatory convertible preferred stock that converts by August 2029. Together, the two offerings can add about 2.3% more shares. Meta will use the money for general corporate purposes. Oct 21, 2026: Meta reported Q3 2026 results. Revenue grew 26% to $64.60 billion, above its guidance of $61-64 billion. Costs grew 68% to $51.61 billion, which includes a $9.89 billion charge for the settlement with state attorneys general. Operating income fell 37% to $12.99 billion, and net income was $9.86 billion. Operating cash flow was $32.79 billion. Capital spending, with finance lease payments, was $34.91 billion, so free cash flow was negative $2.12 billion. Meta guided Q4 2026 revenue to $73-76 billion and 2026 capital spending to $135-145 billion. It bought back no shares in the first nine months of 2026. Oct 21, 2026: Meta's board approved a new class of non-voting Class C common stock, effective January 19, 2027. Each Class A and Class B share will get one Class C share as a stock dividend, so Meta expects the Class A price to show the effect of a two-for-one split. Voting power does not change. Meta said it can use the new class to raise capital, pay employees and buy companies. Under a Founder Alignment Agreement, Mark Zuckerberg can sell 80% of the Class C shares he gets only if he also sells or converts the same number of voting shares. These limits end in steps over eight years while he stays in his role. The board also agreed to pay one more Class C share for each share each time the Class C price doubles again from the September 10, 2026 Class A price of $580.60, adjusted for the dividend, if shareholders also earned at least 10% a year. Oct 21, 2026: In the second New Mexico case, about privacy promises and content moderation, the court set a civil penalty of $25 billion with 15% interest after judgment. The state had asked for $35-40 billion. The court has not yet ruled on the changes to Meta's services that the state asks for. In its Q3 2026 report, Meta said that it set aside an amount for this case, that it will appeal, and that it may have to post a bond during the appeal. Oct 12, 2026: Meta said it will report Q3 2026 results on October 21, 2026, after the market closes. Oct 12, 2026: Meta Superintelligence Labs released Muse Wonder and Muse Wonder Full, its first frontier-class AI models. Developers can use Muse Wonder through Meta's Model API, at $4 per million input tokens and $20 per million output tokens. Muse Wonder Full is only for Muse Code subscribers. Meta said the models will later power parts of the Muse app, first for subscribers. Oct 9, 2026: Hunterbrook, a research firm that also bets against stocks, said that downloads of the Muse app were falling and that its growth was slowing. Oct 8, 2026: Meta stopped ByteDance, the owner of TikTok, from buying ads on Facebook and Instagram in seven countries, including the US, Canada and Japan. The block also covers other advertisers whose ads send users to TikTok or other ByteDance services in these countries. A Meta spokesperson said that Meta does not have to run ads from competitors. Meta did not say how much ad revenue this removes. Oct 1, 2026: In a second New Mexico case, about privacy promises and content moderation, a jury found in late September 2026 that Meta broke the state's Unfair Practices Act more than 43 million times. At a hearing, the state asked the judge for $35-40 billion in penalties, and Meta said a penalty of that size would be unconstitutional. The judge said he would rule within about three weeks. Sep 28, 2026: Meta launched Meta Enterprise Platform, which groups Muse, Meta Business Agent, Muse API and Muse Code for business customers. Meta hired MongoDB CEO CJ Desai to lead it. Meta shares fell 4.8% that day. News reports linked the fall mostly to doubts about AI spending across the industry. Sep removed: 25, 2026: Meta stock fell 3.3%, after a 4.5% gain the day before, when Goldman Sachs warned that AI hyperscalers may need close to $1 trillion a year in AI revenue to earn a strong profit on their current spending. Sep 21, 2026: Meta's new consumer AI products got early traction. Meta One, a paid subscription across Instagram, Facebook, WhatsApp, and Meta AI, launched September 15, and on September 17 Meta reported 15 million subscriptions and trials. The new Muse assistant app, launched September 8, reached number one on Apple's U.S. App Store. The stock rose 11.3% on September 21. Aug 26, 2026: Meta agreed to settle teen social-media addiction claims from 52 state and territory attorneys general. Meta will pay about $12.7 billion over 10 years, and about $5.3 billion more depends on whether TikTok and YouTube adopt similar limits. Meta expects to record about $10 billion of legal expense in Q3 2026 for the deal. The deal adds default two-hour daily time limits and overnight access blocks for teen accounts, and it still needs court approval. It ended the trial before CEO Mark Zuckerberg was set to testify. Aug 6, 2026: A New Mexico jury found in March 2026 that Meta broke the state's consumer-protection law over child safety and imposed a $375 million penalty. On August 6, 2026, a judge in the same case ordered Meta to pay $567 million into a youth mental-health fund. The total New Mexico liability in this case is about $942 million. Meta said it will appeal. Jul 29, 2026: Meta reported Q2 2026 results. Revenue grew 28% to $60.8 billion, but net income fell 14% to $15.8 billion on a $2.4 billion legal charge and $1.18 billion of severance costs. Free cash flow fell 91% to $784 million as capital spending reached $31.1 billion. Meta narrowed full-year 2026 capital spending guidance to $130-145 billion, from $125-145 billion. Capital spending was $72.2 billion in 2025. Meta bought back no shares in the first half of 2026. Jul 28, 2026: Meta and BlackRock announced a venture to build a 1-gigawatt data center in El Paso, Texas, with Meta owning 20% of the project company. The venture's $12.5 billion of bonds priced at a yield near 7.5%. The bonds are not Meta's debt, but Meta guarantees about $13 billion of the project's residual value. May 20, 2026: Meta began cutting about 8,000 jobs, roughly 10% of its headcount. Meta said it moved thousands of other workers into new AI teams. It said it did not expect more company-wide job cuts in 2026.