First Google, then Meta? Big Tech may increasingly sell stock to bankroll $820 billion AI boom.

By Joy Wiltermuth and Christine Ji

Stock investors may not love it - but bond investors already heavily engaged in funding the AI buildout are pleased

More hyperscalers are expected to turn to stock issuances this year, instead of mostly issuing debt, as the AI spending spree shows no sign of letting up.

Another Big Tech company at the heart of the AI buildout could tap the stock market for funding.

Meta Platforms (META) is considering following in Alphabet's (GOOG) (GOOGL) footsteps in raising tens of billions ?of dollars through a giant stock ?offering, the Financial Times reported on Friday.

Meta didn't immediately respond to a request for comment. Its shares fell 5.5% in Friday trading.

Stellar tech-sector earnings have driven the bull market in stocks since 2022. Lately, though, stock performance has diverged as investors take a more discerning approach to the copious amount of corporate spending that's expected in the next few years - and which companies might come out ahead in the AI race.

"The large hyperscalers are being prudent," said Matt Brill, head of North America investment-grade credit at Invesco. "They need a lot of capital and they want diverse sources of capital."

Estimates for $700 billion in AI spending this year are only moving higher. UBS analysts recently upped their AI capital-expenditure forecast to $820 billion for 2026 and nearly $990 billion next year.

"More than 85% of this spending is being driven by the big four technologycompanies," a UBS team led by Ulrike Hoffmann-Burchardi, chief investment officer for the Americas, wrote in a June 1 report.

On its latest earnings call, Meta raised its capex outlook for 2026. The company now anticipates spending between $125 billion and $145 billion in 2026, up from a forecasted range of $115 billion to $135 billion previously.

Alphabet shares fell about 3% on the week after the cloud and internet giant on Monday announced a $80 billion equity offering, of which $10 billion would go to Berkshire Hathaway (BRK.A) (BRK.B) in a private placement. Alphabet also raised its capex projections last quarter; the company now intends to spend up to $190 billion this year, a step up from its $185 billion estimate at the beginning of 2026.

See also: Alphabet asks shareholders to foot an $80 billion bill for AI expansion

The Google equity offering comes on the heels of a Big Tech borrowing spree. In February, Alphabet made a splash by selling tens of billions of dollars of bonds in U.S. dollars, Swiss francs and British pounds. Amazon.com (AMZN) and Meta similarly tapped the credit markets with jumbo bond sales in recent months.

Big Tech may now be turning toward equity funding after the recent explosion in debt issuances. According to Bank of America, hyperscalers have issued $159 billion in debt this year to date, a unprecedented occurrence for companies that have historically been asset-light. Issuing equity could be a way to diversify their financing sources going forward.

"They are looking to get funding from as many different places as they can, so they can thrive," Brill said. "I would not be surprised if additional companies will issue equity, because their needs for capital are so large because of the opportunity."

Stocks overall saw a brutal selloff Friday, after a strong jobs report for May ignited fears that the Federal Reserve might be too late in raising interest rates to tame inflation. Those concerns sent Treasury yields BX:TMUBMUSD02Y BX:TMUBMUSD10Y sharply higher.

The S&P 500 SPX closed 2.6% lower, the Dow Jones Industrial Average DJIA fell 1.4% and the Nasdaq Composite COMP plunged 4.2% on Friday, according to FactSet data.

Read: Amazon joins Meta, Google in jumbo bond club with up to $42 billion issuance

-Joy Wiltermuth -Christine Ji

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06-05-26 1715ET