Meta shares dropped as much as 9.5 per cent on Thursday despite the company raising $25 billion through a six-part investment-grade bond sale that attracted nearly four times the amount on offer. The rout came one day after Meta lifted its 2026 capital expenditure forecast by $10 billion, to a new range of $125 billion to $145 billion, a spending trajectory that even chief executive Mark Zuckerberg has acknowledged he cannot fully explain.
The bond offering, reported by Bloomberg, drew orders of $96 billion against the $25 billion on offer, yet equity investors reacted with alarm. The sharp share decline underscores a growing disconnect between debt markets, which have absorbed roughly $300 billion of AI-linked issuance so far this year, and shareholders concerned about the returns on the industry’s vast infrastructure bets. Meta’s pricing on Thursday came in above the risk premiums from its October deal, a signal that bond buyers themselves are beginning to charge more for the uncertainty embedded in these investments.
Bond Sale and Market Reaction
The $25 billion sale is the latest leg of a much larger financing push. Over the past six months, Meta has also raised approximately $30 billion through off-balance-sheet financing linked to a special purpose vehicle associated with Blue Owl Capital. That private capital transaction, finalized in October 2025, funds Meta’s Hyperion data centre campus in Louisiana, expected to become the company’s largest data centre globally upon completion in 2029. The financing package comprises $27 billion in debt and $2.5 billion in equity, arranged by Morgan Stanley, with Meta retaining a 20 per cent stake. Together, the two mechanisms represent more than $55 billion in new financing tied to Meta’s AI buildout in the past six months alone.
Despite the scale of the raising, equity investors remain unconvinced. Meta’s chief executive has offered no clear roadmap for when the extraordinary spending will translate into commensurate revenue or profit, leaving shareholders to weigh the risk of overinvestment in a technology whose commercial applications are still taking shape. The company’s stock closed at $608.75 on 1 May 2026, down sharply from its all-time high closing price of $788.15 on 12 August 2025, as the market has steadily repriced the stock relative to the spending trajectory.
The Hyperscaler Spending Spree
Meta is not alone in this dynamic. Amazon raised nearly $54 billion in bond markets last month, including a $37 billion sale in March 2026 that attracted approximately $126 billion in peak demand. Alphabet priced $32 billion in dollar and euro notes in February, including a rare 100-year sterling bond. Oracle raised $25 billion in a sale that drew a record $129 billion in orders in February, funding its AI cloud infrastructure expansion. Collectively, the four largest hyperscalers are now expected to spend up to $725 billion on AI infrastructure this year. The debt markets have absorbed roughly $300 billion of AI-linked issuance so far, but the terms are shifting as lenders demand higher compensation for the risk that these massive bets may not pay off as quickly or as richly as hoped.
Internal Restructuring and Metaverse Retreat
Inside Meta, the spending acceleration on AI is being paired with cuts elsewhere. The company’s metaverse division, Reality Labs, has been scaled back after burning through billions with limited commercial return. For the 12 months ending 31 December 2025, Reality Labs generated $2.2 billion in revenue but reported an operating loss of $19.2 billion. Since its inception in 2020, the division has accumulated an operational loss of $83.6 billion against just $11.8 billion in revenue. Mark Zuckerberg has indicated a strategic shift toward “glasses and wearables” and aims to make virtual reality a profitable ecosystem, anticipating that Reality Labs’ losses will likely peak and gradually decrease going forward.
Workforce reductions of 20 per cent or more are being prepared. A first round of roughly half that number is expected on 20 May 2026, affecting around 8,000 employees, or about 10 per cent of Meta’s global workforce. The cuts are part of a broader restructuring tied to the massive AI spending and will target Reality Labs, recruiting, sales, global operations, and the Facebook social division.
