Meta: 26% growth, about $37.5 billion of stock offerings priced, read two ways

Update, Oct. 28, 2026: A group of Meta Class A stockholders sued Meta’s chief executive and its directors on Oct. 27 in Delaware’s Court of Chancery (No. 2026-1413), seeking to block the reclassification that would create non-voting Class C stock. The change has not yet taken effect, according to the complaint.[19] Bloomberg Law and Courthouse News also reported the suit.[20][21]

Key figure: META Q3 2026 revenue, $64.6B, up 26% from a year earlier. Source: Meta earnings release, Oct. 21, 2026.[1]

The bull case

1. Revenue up 26%. Ad impressions grew 10% and the average price per ad rose 14%. Fourth-quarter revenue is guided to $73 billion to $76 billion.[1]
2. Operating income up 11% excluding the legal charge, to $22.88 billion, by Meta’s own figures. Reported (GAAP) operating income fell 37% to $13.0 billion after a $9.89 billion charge.[1][4]
3. Muse is scaling. More than 10 million people in the U.S. and Canada set up Muse agents in a month and a half, and about 25% use it on any given day, the CEO said.[4]
4. Cornerstone interest. Nvidia, AMD and Broadcom gave non-binding indications of interest in buying up to $5.0 billion of the common stock offering at its original $22.5 billion launch size.[5][8] It priced upsized at $25.0 billion, 40 million Class A shares at $625.00.[6] Nine-month operating cash flow still rose 22% to $96.9 billion.[1] A Citigroup analyst said Meta is entering “an AI product super-cycle,” CNBC reported.[11]

The bear case

1. Free cash flow turned negative. Capex of $34.91 billion topped $32.79 billion of operating cash flow.[1] The CFO expects “to continue investing aggressively” after 2026.[4]
2. About $37.5 billion of new equity, priced Oct. 26 ($25.0 billion of Class A stock at $625.00 and $12.5 billion of 6.50% mandatory convertible preferred, both to settle Oct. 29), plus a planned at-the-market program of about $60 billion in non-voting Class C stock, with no agreement yet and timing, size and terms not set.[5][6][7][8] Five days before the launch, the CFO said: “We don’t have any specific financing plans to announce at this time but we thought it was prudent to establish the appropriate capital structure framework to ensure that we have access to a diverse pool of funding sources.”[4]
3. $454.5 billion in commitments, with $121.4 billion due in 2027.[3] Debt on the scale management was considering “could have an adverse effect on the Company’s credit ratings,” the board’s special committee said in Meta’s information statement.[9]
4. Legal and Muse costs. The attorneys general deal runs up to $18.59 billion.[1] A Scotiabank analyst said Muse’s path to profit depends on “a substantial reduction in serving costs,” Benzinga reported.[12]

Exhibit 1. Revenue rose 26% to $64.6B in Q3 2026. Quarterly revenue, $B. Q4 2026 is the outlook range ($73B to $76B). Source: Meta earnings releases, Form 8-K. Chart: New Street.[1][10]

Exhibit 2. Capex passed operating cash flow in Q3 2026. Quarterly, $B. Capex includes finance-lease principal. Labels: free cash flow. Source: Meta earnings releases, Form 8-K. Chart: New Street.[1][10]

Market data: META closed at $630.56 on Oct. 26 (StatMuse, StockAnalysis),[13][14] a market value of about $1.61T, No. 9 among listed companies (StockAnalysis, CompaniesMarketCap).[15][16] Consensus 2026 EPS is $29.44 (FactSet via MarketWatch) to $30.11 (S&P Global via StockAnalysis), about 21 times 2026 estimates.[17][18]

New Street calculations (from primary figures): Operating income excluding the charge ($22.88B) is Meta’s figure in the release [1], not a defined non-GAAP measure; check: $12,988M + $9,890M = $22,878M; 11% is the CFO’s figure [4] ($22,878M / $20,535M - 1 = 11.4%). Free cash flow = operating cash flow minus purchases of property and equipment minus principal payments on finance leases: Q3 2026 $32,786M - $33,942M - $964M = -$2,120M, as reported [1]. “Capex” in Exhibit 2 = purchases of property and equipment plus finance-lease principal (Q2 2025: $16,538M + $474M = $17.01B) [10]. “Other and RL” in Exhibit 1 = total revenue minus advertising revenue [1][10]. Exhibit 1 outlook bar is drawn at the $74.5B midpoint with a bar to $73B and $76B. Equity priced = $25.0B (40,000,000 Class A shares x $625.00) + $12.5B (250,000,000 depositary shares x $50.00) = $37.5B, before options for 6,000,000 more Class A shares ($3.75B at $625.00) and 37,500,000 more depositary shares ($1.875B) [6]; at launch it was $22.5B + $12.5B = about $35B [5]. Meta expects Class A proceeds (about $24.9B net, before expenses) when the forward sale agreements settle, on or before Nov. 19, 2027 [6]. P/E on 2026 consensus EPS = $630.56 / $30.11 = 20.9 and $630.56 / $29.44 = 21.4 [13][17][18]. Nine-month operating cash flow growth = $96,873M / $79,586M - 1 = 21.7%, shown as 22% [1]. Days from the Oct. 21 call to the Oct. 26 launch and pricing = 5.