Key Highlights

● Meta rose 1.96% to $624.52 on Thursday, ending a five-session losing streak.

● The roughly $37.5 billion common and preferred offerings were scheduled to close on October 29.

● Third-quarter Revenue rose 26% to $64.6 billion, above the roughly $63.4 billion expected.

● Free Cash Flow was negative $2.1 billion as 2026 capex guidance rose.

What set Meta Platforms (NASDAQ:META) apart on Thursday was the direction of its move. On a day when Alphabet (NASDAQ:GOOGL) fell 12% and most large technology stocks declined, Meta rose 1.96% to $624.52 on 30.8 million shares, ending a five-session losing streak. Its relative Volume reading of 1.13 put trading slightly above normal, and at about $19.2 billion in value Meta ranked fourth among US stocks. The rebound came on the day Meta's roughly $37.5 billion package of common and preferred stock offerings was scheduled to close, and it left the shares almost exactly at the $625 price at which the company sold new common stock earlier in the week.

A rebound after a steep slide

Thursday's gain followed a difficult stretch. Through Wednesday's close of $612.49, Meta had fallen in five straight sessions for a cumulative decline of 12.2%, erasing about $217 billion in market value, according to one report. That left the stock 21.2% below its 52-week high of $777.59 and down about 7% for the year, while the S&P 500 had gained about 14%. On Thursday the shares traded as high as $634.68, according to market data.

The comparison with Alphabet may have helped. Both companies sell digital Advertising and are spending heavily on AI, but Alphabet's report showed search growth slowing to 12% and Capital spending of $51.4 billion pushing free cash flow to negative $9.1 billion. Meta's own report, released the previous week, had shown revenue still growing 26%, and its financing was already arranged. The broader market was weak: the Nasdaq Composite fell 1.38% and the S&P 500 lost 0.30%, according to market commentary.

The financing behind the move

On October 27, Meta priced a Class A common stock offering upsized to $25 billion from $22.5 billion, at $625 per share, along with 250 million depositary shares at $50 each representing 6.50% Series A mandatory convertible preferred stock, according to a summary of the company's release. The common shares were sold through forward sale agreements that settle by November 19, 2027, with expected net proceeds of about $24.9 billion, while the preferred offering was expected to raise about $12.5 billion. Both offerings were expected to close on October 29. One report, citing media reports, said Demand for the common stock was about five times the shares available.

Strategic investors joined the deal. Nvidia (NASDAQ:NVDA) said it would invest $3 billion in the offering, and AMD (NASDAQ:AMD) said it would invest $1 billion as the two companies expand their AI infrastructure partnership, the same report said. It added that Meta is seeking about $98 billion overall to fund AI spending, with a separate share-sale program of up to $60 billion planned to begin in the first quarter of 2027. Earlier, Meta created a new class of non-voting shares that it said could be used to raise capital.

What the third quarter showed

Meta's third-quarter revenue rose 26% to $64.6 billion, above the roughly $63.4 billion analysts expected, according to market data. Ad impressions grew 10% and the average price per ad rose 14%. Daily active people across its apps rose 3% to 3.64 billion. Earnings Per Share were $7.40, above a consensus of $6.54, according to another report.

The costs were heavier. Results included a $9.9 billion charge tied to an agreement with US state attorneys general. Excluding it, Operating Income rose 11% to $22.9 billion, and the Operating Margin narrowed to 35% from 40%. Capital spending reached $34.9 billion, and Meta raised the low end of its 2026 capex guidance, which now stands at $135 billion to $145 billion compared with $130 billion to $145 billion previously. Free cash flow was negative $2.1 billion on the company's definition, compared with a $10.6 billion inflow a year earlier.

One report put total Debt obligations, including finance leases, at about $115 billion at the end of September. Management said it expects to spend aggressively again in 2027 if its Muse AI agent keeps gaining traction; Muse reached 2.5 million daily users in about six weeks. For the fourth quarter, Meta guided to revenue of $73 billion to $76 billion, against analyst expectations of about $74.4 billion. The stock fell about 7% in the session after the report, as investors weighed the spending against the revenue growth.

What Meta does

Meta owns Facebook, Instagram, WhatsApp, Messenger and Threads, and earns almost all of its revenue from advertising across those apps. Its Reality Labs unit develops virtual and Augmented Reality hardware, including smart glasses, and the company is building large AI models and data centers to support ads, recommendations and new assistant products. Meta is a constituent of the S&P 500, the Nasdaq-100 and the Russell 1000. It is not a member of the Dow Jones Industrial Average.

Valuation

Market data put Meta at about 21.3 times trailing earnings of $29.33 per share, with a Market Value of about $1.6 trillion. Another source put its forward P/E at about 21.0, slightly below its 10-year average of 22.3. On the same session data, Microsoft (NASDAQ:MSFT) traded at about 27.7 times trailing earnings and Amazon (NASDAQ:AMZN) at about 19.6, while Alphabet's Class C shares, after Thursday's drop, traded at about 14.7, a figure flattered by Investment gains. Meta pays a quarterly Dividend of $0.525 per share, a Yield of about 0.3%.

The bull and bear cases

The bull case rests on the strength of the core ad business. Revenue growth of 26% at Meta's scale, with both ad volume and pricing rising, suggests its AI-driven ad targeting is working, and the strong demand for its stock offering shows that large investors, including two of its chip suppliers, are willing to fund the build-out. Market data lists recent target increases from three brokerages, to $875, $800 and $1,000, with an average target among covering analysts of about $833.

The bear case is about dilution, cash and legal costs. Meta's spending now exceeds its operating cash flow, and the financing plan relies heavily on new Equity that dilutes existing holders. One brokerage cut its target to $750 from $830 while keeping an Outperform rating. Legal exposure has also grown: one report noted that a New Mexico judge ordered Meta to pay $25 billion, which Meta plans to appeal, following an $18 billion settlement with 48 other states.

What to watch next

Near term, investors will watch whether the stock holds around the $625 offering price, how quickly Meta draws on its planned share-sale program, and whether underwriters exercise their 30-day option to buy up to $3.75 billion in additional shares. Meta's next report, expected in January 2027, is likely to include 2027 spending guidance, and free cash flow will be a central metric. Growth in Muse usage and any update on the New Mexico appeal are also on the list.