Meta is ramping up its investment in AI: increasing spending and preparing to issue a new class of shares

Meta Platforms raised its capital expenditure forecast and announced plans to create a new class of non-voting shares, further increasing its already massive investments in artificial intelligence. The tech giant’s quarterly report and its future plans could serve as an important indicator for a market that is increasingly skeptical about the sustainability of the AI boom. It is clear that Meta has no intention of cutting costs.

The company's stock rose 4% in after-hours trading on October 21.

Meta Platforms' third-quarter revenue rose 26% to $64.6 billion, compared with the expected $63.4 billion, CNBC reports, citing forecasts from LSEG analysts. The company's core advertising business continues to perform well, Bloomberg explains.

The company's earnings jumped 265% to $3.83 per share.

The number of daily active users of Meta’s apps, including Facebook and Instagram, totaled 3.64 billion last quarter—slightly less than Wall Street had expected. At the same time, user engagement reached a record high, primarily thanks to video content, company CEO Mark Zuckerberg said during a conference call following the release of the earnings report.

For the current quarter, Meta expects revenue in the range of $73–76 billion, exceeding analysts’ estimates. However, the company did not provide a forecast for next year, promising only that it would maintain strong growth.

Meta's capital expenditures for 2026 are expected to be higher than the company had previously announced: it has raised the lower end of its forecast, which now calls for spending in the range of $135–145 billion instead of $130–145 billion. “Our investments are paying off, our core business remains strong, and we’re gaining momentum across the board,” Zuckerberg said.

Meta announced the creation of Class C common shares with no voting rights. These shares will be distributed to all existing shareholders as a stock dividend. In effect, this will be a two-for-one stock split, according to CNBC. Trading in the new shares is expected to begin in January.

As the company explained, this will allow it to “fund its growth and maintain its leadership in a highly competitive environment.” As reported by Semafor, which was the first to break the news about Meta’s plans, the issuance of a new class of shares will allow the company to increase its spending on AI without weakening Zuckerberg’s control over the business.

These steps demonstrate Meta’s confidence that its investments in AI will pay off, Bloomberg notes. Zuckerberg had struggled to convince investors to accept the rapidly rising costs of ambitious AI projects, but in recent months, Meta has made progress in developing its technologies.

"There has been a lot of talk that Meta will announce a major stock offering today. The issuance of Class C shares is a step in that direction, but it appears that nothing will happen until 2027—if such a offering takes place at all,” commented Adam Krisafulli, an analyst at Vital Knowledge.

Over the past year and a half, Zuckerberg has refocused the company on strengthening its position in the AI race. One of the most significant steps in this direction was the September release of Muse —a personalized AI assistant designed to automate everyday tasks. Muse quickly topped the mobile app charts, and Meta’s stock rebounded from its August low, posting its best monthly performance in 13 years.

In October, the company unveiled its new AI model, Muse Wonder, with “state-of-the-art capabilities,” stating that it is comparable to OpenAI’s ChatGPT and Anthropic’s Claude in programming and addressing financial and legal issues.

During a conference call, Zuckerberg said that, over time, Muse’s revenue per user is expected to exceed several hundred dollars a year—the amount the company currently earns from users of its social networks. At the same time, it is expected that significant revenue will come from businesses rather than users, which points to ambitious plans for e-commerce expansion, according to Bloomberg.

Chief Financial Officer Susan Lee said that new artificial intelligence tools could generate “additional” revenue in 2027 through subscriptions and commissions on transactions made using an AI agent. She noted, however, that Meta primarily views these areas as long-term investments that will pay off over time.

As management outlined the monetization opportunities for Muse, Meta’s stock temporarily accelerated its rise. Zuckerberg promised that Meta would launch it sooner than usual. Previously, he preferred to wait until a product’s audience reached 1 billion users before introducing ads and other monetization methods, Bloomberg notes.

At the same time, he acknowledged that the main constraint on AI development is a lack of computing power. That is why the service is currently available only in the U.S. and Canada. The company plans to improve the efficiency of the AI agent’s use of computing resources and expand into new markets.

This article was AI-translated and verified by a human editor