Meta announced a new class of non-voting Class C stock to fund its artificial intelligence expansion while preserving CEO Mark Zuckerberg's voting control. Issued as an effective two-for-one stock split in January 2027, the structure supports an updated 2026 capital expenditure forecast of $135 billion to $145 billion. Despite Q3 revenue rising 26% to $64.60 billion and strong adoption of its Muse AI agent, heavy infrastructure spending generated a $2.12 billion free cash flow deficit.
Meta creates Class C non-voting stock
- ▪Meta announced on October 21, 2026, that it will create a new class of non-voting Class C common stock in January 2027 to raise capital, fund acquisitions, and offer employee compensation
- ▪Meta's creation of non-voting Class C stock allows Meta to raise capital for artificial intelligence expansion without diluting CEO Mark Zuckerberg's voting control
- ▪A special committee of Meta's board determined that Mark Zuckerberg was best suited to lead Meta and created Class C stock to maintain a founder-led corporate model
Meta's capital expenditures and AI investments
- ▪Meta raised the lower bound of its 2026 annual capital expenditure forecast to between $135 billion and $145 billion to expand data centers and artificial intelligence infrastructure
- ▪Meta CFO Susan Li stated that the Class C share creation expands funding tools and offers flexibility to invest behind artificial intelligence momentum across Meta's business
- ▪Meta reported $34.91 billion in capital expenditures during the third quarter of 2026 to power artificial intelligence model development and infrastructure
Muse AI performance and privacy issues
- ▪Meta CFO Susan Li forecast that Meta's artificial intelligence businesses, including the Muse AI agent, will begin contributing incremental revenue in 2027
- ▪Meta paused the conversation-sharing feature on its Muse AI agent after security researchers discovered user chats were publicly accessible on the web
- ▪Meta CEO Mark Zuckerberg reported that more than 10 million people in the United States and Canada set up Muse AI agent accounts within six weeks of its launch
Meta's third-quarter 2026 financial results
- ▪Meta recorded a free cash flow deficit of $2.12 billion in the third quarter of 2026, compared to positive free cash flow of $10.63 billion a year earlier
- ▪Meta reported third-quarter 2026 revenue of $64.60 billion, a 26% year-over-year increase that surpassed Wall Street analyst expectations
- ▪Meta recorded third-quarter 2026 net income of $9.8 billion and diluted earnings per share of $3.83, impacted by a $9.89 billion legal charge related to its settlement of social-media harm lawsuits
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