Meta Platforms faced a sharp selloff on Friday, with shares tumbling 5.5% to $593, as investor concerns over the company's massive artificial intelligence spending plans overshadowed positive institutional filings. The selloff was triggered by reports that the social media giant is considering a multibillion-dollar stock sale to fund its AI infrastructure expansion, including data centers and specialized hardware.
Institutional Holdings Surface
Despite the market jitters, recent SEC filings revealed that Waystone Advisors, Eaton Financial Holdings, and Fidelis Capital Partners collectively held approximately $31.4 million in Meta shares as of December 31. These disclosures, based on quarterly 13F filings, indicate that these firms maintained their positions heading into 2026, even as Meta's stock faced headwinds from its aggressive AI investment plans.
Waystone Advisors initiated a new position in Meta during the fourth quarter, purchasing 5,442 shares valued at about $3.59 million. Eaton Financial boosted its stake by 13.4%, acquiring an additional 1,523 shares to reach 12,917 shares worth $8.53 million. Fidelis Capital raised its holdings by 5.2%, adding 1,445 shares to total 29,269 shares, valued at approximately $19.32 million.
AI Funding Concerns Weigh
The stock's decline came after a Financial Times report, cited by Reuters, indicated Meta was exploring a massive equity offering to raise tens of billions of dollars for AI infrastructure. This follows Alphabet's recent $84.75 billion debt offering, underscoring the capital-intensive nature of the AI race. However, Reuters noted that Meta has not yet hired banks and may ultimately decide against the sale.
A Meta spokesperson dismissed the report as "pure speculation," emphasizing the company's commitment to flexible funding strategies for its AI push, according to a TradingView article. The potential dilution from such a stock sale has clearly rattled investors, who are also grappling with rising capital expenditure forecasts.
Rising Costs and Revenue Growth
Meta's first-quarter results showed robust revenue of $56.31 billion, a 33% year-over-year increase, with diluted earnings per share of $10.44. CEO Mark Zuckerberg hailed it as a "milestone quarter," projecting that Meta would deliver "personal superintelligence to billions of people." However, the company's updated 2026 capital expenditure guidance of $125 billion to $145 billion, up from the prior $115 billion to $135 billion, has fueled investor anxiety.
The higher capex reflects escalating costs for servers, chips, and data center construction. While some analysts, like Rosenblatt's Barton Crockett, see potential in Meta's paid subscription model as a future revenue driver, the near-term financial strain remains a key concern. Rosenblatt maintains a Buy rating with a $1,015 price target.
Market Outlook and Risks
MarketBeat data shows institutional and hedge fund ownership at 79.91%, indicating continued professional investor interest. The average analyst price target stands at $840.60, with a "Moderate Buy" consensus. However, the 13F filings are backward-looking and do not reflect current positions or sales since December.
Beyond funding, Meta faces regulatory challenges in the U.S. and Europe, including youth-related legal cases that could impact its business. The company's ability to balance AI investment with shareholder value will be critical as it navigates these headwinds. Friday's selloff has sharpened focus on Meta's financing strategy, leaving investors to weigh the potential rewards of AI against the risks of dilution and rising costs.
