Meta eyes up to $25B bond sale as AI spending bills stack up

Meta is shopping a bond sale worth $20 billion to $25 billion, moving into the market Tuesday to feed its artificial intelligence infrastructure and services push. About two-thirds of the debt will be sold in U.S. dollars and one-third in euros, according to Bloomberg, citing people familiar with the matter who spoke on condition of anonymity. Final pricing is expected Tuesday afternoon, and Meta declined to comment.

The timing isn't random. Days ago, S&P Global Ratings trimmed Meta's outlook from AA- stable to AA- negative, pointing to uncertainty over the company's hefty capex spending and its negative free cash flow.

Meta's third-quarter report, out last month, showed full-year capex heading for $135 billion to $145 billion after the company lifted the low end of its earlier guidance by $5 billion. Free cash flow for the quarter was negative $2.12 billion, putting the Facebook parent in the same boat as Alphabet and Amazon, which also recently logged negative figures.

This is a familiar move for Zuckerberg's company. Meta pulled in $25 billion from a bond sale in April, and last week said it intends to raise $95 billion overall to bankroll its AI ambitions. The plan starts with $35 billion in underwritten public equity offerings, plus another $60 billion through an at-the-market program.

Wall Street shrugged off the dilution talk on Tuesday, at least briefly. Meta's stock rose 2.7% after sliding in 12 of the prior 14 trading sessions and wrapping October with its worst month in four years.