Meta creates non-voting Class C shares to fund AI push as Q3 revenue rises 26%

Meta will create a new class of non-voting Class C shares that it can use to raise capital for its AI build-out, the company said with its third-quarter 2026 results on 21 October [1]. Revenue rose 26% to $64.60 billion, and Meta now expects 2026 capital expenditures of $135-145 billion [1].

What is Meta's new Class C stock?

Meta's board approved a publicly listed, non-voting Class C common stock with an effective date of 19 January 2027, on the unanimous recommendation of a special committee of independent directors [1][2]. Meta says the new class is meant for capital raising, employee compensation, potential acquisitions and other general corporate purposes [1].

Meta plans to pay one non-voting Class C share for each Class A and Class B share after 19 January 2027. Meta says it then expects the Class A share price to reflect the effect of a two-for-one stock split, and it intends to list the Class C stock on Nasdaq [1].

According to the 8-K filing, shareholders approved the change by written consent on 20 October [2]. Under a Founder Alignment Agreement, 20% of the Class C shares Mark Zuckerberg's group receives will be freely saleable, while the other 80% carry sale restrictions tied to his voting power [2].

How much is Meta spending on AI?

Meta expects 2026 capital expenditures of $135-145 billion, narrowed from its prior outlook of $130-145 billion. Third-quarter capital expenditures were $34.91 billion, and free cash flow was negative $2.12 billion [1].

The release says the scale of investment needed to compete amid the AI transformation is significant [1]. For 2027, Meta says it expects to keep investing aggressively in its core business and emerging AI initiatives, and it expects Reality Labs losses to narrow to around $15 billion as it shifts investment primarily to AI [1].

How did Meta's third quarter go?

Meta reported third-quarter 2026 revenue of $64.60 billion, up 26% year over year. Net income was $9.86 billion, after a $9.89 billion charge tied to its settlement with 52 US state attorneys general over teen mental health litigation [1].

Meta guided fourth-quarter revenue to $73-76 billion. Its headcount was 66,775 at the end of September, down 15% from a year earlier [1]. CFO Susan Li said on the earnings call that the new shares give Meta flexibility to invest, according to The Verge [3].

Our read

Opinion: A non-voting share class lets Meta tap markets for AI money without diluting Mark Zuckerberg's control, which says a lot about how long Meta thinks this spending cycle will last. Negative free cash flow in a record-revenue quarter is the clearest sign of how expensive the AI race has become.

What we could not verify

• Whether and when Meta will sell new Class C shares to raise capital, and how much; the release names capital raising as a purpose but announces no specific offering.
• How much of the 2026 capital expenditure goes specifically to AI infrastructure.
• User numbers for Meta's Muse agent beyond what third parties report.