NVIDIA (NVDA) and Meta Platforms Expand AI Collaboration

Meta Platforms (META) announced a 2-for-1 stock split for January 19, 2027, creating Class C non-voting shares. The move aims to maintain CEO Mark Zuckerberg's voting control and potentially fund AI-related growth. Meta's stock has risen 1,615% since its IPO, according to the company.

Wells Fargo reiterated its Overweight rating and $995 price target for Meta Platforms (META) after the company announced a $95B equity financing plan for AI initiatives. The stock trades at $630.56, with a P/E ratio of 21.6 and PEG ratio of 0.74. The plan includes $35B in underwritten offerings and a $60B at-the-market program. Nvidia, AMD, and Broadcom may invest up to $5B.

Meta Platforms plans to raise up to $95B in equity funding, citing high AI infrastructure costs. The move signals an industry-wide AI funding crunch, with tech companies scrambling for cash. Meta's Q3 free cash flow turned negative, swinging from $10.63B to -$2.12B. Elon Musk warns over 200 neocloud providers face financial challenges due to tight credit conditions.

Citizens maintained a Market Outperform rating and $885 price target on Meta (META) after its $100B capital raise announcement. Meta's stock is down 9% week-over-week, trading at $630.56. The capital raise aims to fund a 2027 cash flow shortfall and support AI infrastructure. Analysts from Canaccord Genuity, Rosenblatt, Wedbush, and Mizuho also reaffirmed positive ratings and raised price targets.

Global VC investment in AI neoclouds reached $6.6B in 2024, up 51% from 2023, with Nvidia's CEO Jensen Huang stating demand for capital exceeds availability. Nscale raised $2B in equity and $1.4B in debt, while Together AI raised $800M. Nvidia invests in and supplies GPUs to these companies. Publicly traded CoreWeave and Nebius shares have declined on spending concerns.

Nvidia is investing $3 billion in Meta's equity offering. The companies plan to expand their partnership, with Meta increasing its use of Nvidia hardware for AI agents. Meta aims to raise up to $95 billion through stock offerings for AI infrastructure, with AMD and Broadcom expressing interest in buying up to $5 billion in shares combined.