Meta Stock Strategy: New Non-Voting Shares Aim to Fund AI Expansion

Meta has officially confirmed it is creating a brand new category of stock to help pay for its expanding artificial intelligence operations. The company revealed this during its third-quarter earnings call on Wednesday, validating reports that had circulated earlier in the day. This new instrument is designed to give the social media giant more financial flexibility without changing the balance of power among its existing investors.

The plan involves issuing non-voting capital stock. Susan Li, the company's chief financial officer, explained that these shares will be distributed to all current shareholders as a stock dividend. The primary goal is to create a publicly traded asset that can be used for raising capital, compensating employees, and funding acquisitions. By using this method, Meta can secure the necessary funding while preserving the voting rights held by owners of its existing Class A and Class B shares.

Li emphasized that this structure helps maintain what she described as the company's founder-led governance. She stated that the new shares provide additional funding tools. This allows Meta to move with agility and invest behind the significant momentum it is seeing across its business, which she noted is largely driven by AI. The strategy is a clear signal that the company intends to keep spending heavily on its technology roadmap.

The announcement came alongside a strong financial report for the third quarter. Meta beat Wall Street expectations, reporting total revenue of $64 billion. This represents a 26 percent increase compared to the same period last year. However, the growth came with a price tag. The company's costs and expenses also climbed sharply, rising by 68 percent year-over-year. This spike in spending aligns with the heavy investment in infrastructure and development that the new stock is meant to support.

Not every part of the business is profitable yet. Reality Labs, the division responsible for augmented reality glasses, virtual reality headsets, and related software, continues to lose money. However, the losses are shrinking. In its earnings report, the company projected that the division's losses will narrow from their 2025 levels to a range of $18 billion to $19 billion. This improvement suggests that while the hardware division is still a drain on resources, it is becoming less of a burden than it was previously.

The push into AI has been a major focus for Meta over the last twelve months. The company released several models earlier in the year, including Muse Spark and Muse Glimmer. More recently, it added Muse Wonder and Muse Spark Open. The latter is an open-weight model, meaning its underlying parameters are available for outside developers to use and build upon. Meta also launched Muse Code, a tool designed for software developers, and announced a line of avatar options for its AI assistant, Meta Muse, at its Connect event this year.

CEO Mark Zuckerberg said the AI products are gaining traction. He noted that in just six weeks, more than 10 million people in the United States and Canada had set up personal agents using Muse. Zuckerberg stated that growth remains strong and that the app has held the number one spot in the App Store almost every day. He described the current moment as a shift into a more operational phase focused on scaling the product to eventually serve billions of people.

Despite the optimism surrounding AI, the company acknowledged some lingering risks. Li mentioned that the team is monitoring active legal and regulatory matters that could impact financial results. Specifically, she pointed to ongoing scrutiny regarding youth-related issues in several markets. The company has a number of trials related to these issues scheduled in the coming months within the United States, which could present additional challenges for the business.