Social media giant Meta Platforms (META) is planning to raise at least $25 billion on Thursday by selling investment-grade bonds. This announcement came just one day after CEO Mark Zuckerberg said that the company would ramp up spending on artificial intelligence in the coming year. If successful, the bond sale would be one of the largest of 2025, just behind Mars Inc.’s $26 billion offering in March, which helped fund its acquisition of Kellanova.
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According to Bloomberg, Meta’s bonds could be issued in as many as six parts, with terms ranging from five to 40 years. Notably, the 40-year bond may yield about 1.4% more than Treasury bonds, with proceeds going toward general business needs. It’s also worth mentioning that Meta’s growing investment in AI is being used to improve its major platforms like Facebook and Instagram. To support this, the company needs to build a lot of infrastructure, particularly data centers.
Therefore, on Wednesday, Meta stated it expects to spend up to $72 billion on capital expenses in 2025 and that this spending will increase even further in 2026. However, despite these investments, Meta’s stock tanked on Thursday due to investor worries over rising costs and lower near-term returns. Separately, Meta also raised about $30 billion for a data center project in rural Louisiana, with help from Blue Owl Capital (OWL) and Pimco. Interestingly, Blue Owl owns 80% of the project, while Meta owns the rest.
Is Meta a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 40 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $875.90 per share implies 33% upside potential.
