Meta Gains 0.12% Pre-Market as Nvidia Plans to Buy $3 Billion of Its Stock and Deepen Muse AI Collaboration

TradingKey - On October 27, Eastern Time, Meta Platforms (META) announced an expanded artificial intelligence partnership with Nvidia (NVDA). Nvidia will invest $3 billion to participate in Meta's equity offering.

According to a joint statement, Meta plans to expand the deployment of Nvidia infrastructure within its data centers, including the adoption of the Vera Rubin platform, Vera CPUs, and Nvidia networking technology to support next-generation AI agents. The two companies will also collaborate to enhance the training and inference performance of Meta's Muse series of AI models.

As of press time, Meta rose 0.12% in pre-market trading to $631.31, while Nvidia gained 0.05% to $216.1.

[Source: TradingView]

Nvidia Chief Executive Officer Jensen Huang stated that the two sides will optimize end-to-end computing infrastructure to enhance the performance, efficiency, and security of AI agents.

The collaboration comes as Meta steps up its investment in AI infrastructure. Meta announced on October 26 the launch of two securities offerings totaling approximately $35 billion, including $22.5 billion of Class A common stock and about $12.5 billion of depositary shares representing mandatory convertible preferred stock. Subsequently, the company raised the common stock offering size to $25 billion, bringing the combined total of the two offerings to approximately $37.5 billion.

In addition, the company plans to launch an at-the-market equity offering program of up to $60 billion after its newly created non-voting Class C common stock begins trading, with the new shares expected to start trading in the first quarter of 2027.

Meta expects its 2026 capital expenditures (including principal payments on finance leases) to reach $135 billion to $145 billion, primarily to support the development of its core business and AI operations.

The company said AI investments have already generated additional revenue for its advertising business by boosting user engagement, improving content recommendations, and enhancing ad monetization efficiency. However, Meta recorded a negative free cash flow of $2.12 billion in the third quarter, indicating that heavy capital expenditures have put pressure on short-term cash flow.

For investors, Nvidia's participation in Meta's equity offering and the deepening of their technical collaboration reflect the increasingly close relationship between major tech companies and AI chip suppliers.

Meanwhile, Meta's continuously rising capital expenditures and financing plans also warrant attention. Going forward, the market will focus on evaluating whether AI investments can consistently translate into revenue growth, as well as the impact of related spending on cash flow and shareholders' equity.