Nvidia just announced plans to invest billions in Meta's muse

When Metaplatforms (NASDAQ: META) released its quarterly report last week, it contained more than the usual financial information. The social media and artificial intelligence (AI) provider announced plans to create a new class of shares: Class C shares. These non-voting shares, which are expected to begin trading early next year, will be used primarily to raise capital to fund skyrocketing AI spending, employee compensation and to fund potential acquisitions. Meta plans to conduct a 2-for-1 stock split on January 19, 2027 – in the form of a stock dividend – by issuing one share of Class C stock to shareholders of record for each share of Class A or Class B common stock they own.

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Perhaps most importantly, Meta announced plans to raise a total of $95 billion to support its heavy investments in AI – and the move is attracting support from some of the biggest names in tech. The main one is Nvidia (NASDAQ:NVDA), arguably the architect of the AI revolution. Just this morning, the semiconductor specialist announced its intention to invest billions of dollars in Meta to finance its AI ambitions.

Meta and NVIDIA logos on blue and green views of their corporate campuses

Image source: The Motley Fool.

You can’t spell AI without Nvidia

In a separate press release issued Monday, Nvidia and Meta announced plans to expand their collaboration on the Muse family of AI models, citing the growing popularity and demand for AI agents. Indeed, Meta’s Muse models and AI agents, powered by Nvidia processors, have “delivered best-in-class benchmark performance and increased mainstream downloads since their launch,” according to the release.

The two partners plan to deepen their collaboration, “joining together to optimize workflows to maximize performance and improve total cost of ownership.” Nvidia and Meta are also exploring other opportunities, including the use of Nvidia’s OpenShell and Sentry, designed to ensure the secure deployment and monitoring of AI agent behavior.

Meta also plans to increase its deployment of Vera Rubin graphics processing units (GPUs), Vera processors and Nvidia Spectrum-X Ethernet to improve the performance of its AI agents,

Meta is already one of Nvidia’s biggest customers. The two expanded their partnership earlier this year, announcing a multi-year deal that would see Meta deploy “millions” of Nvidia’s Blackwell and Rubin chips, as well as the company’s Grace and Vera processors.

Show me the money

Meta’s fundraising efforts will span the coming months. First, the company will raise $35 billion through an underwritten public offering, attracting cornerstone investors such as Nvidia, Advanced microdevicesAnd Broadcom. The trio of AI chipmakers have expressed interest in purchasing up to $5 billion of Meta’s Class A stock, with Nvidia contributing $3 billion. Meta plans to raise an additional $60 billion through the sale of Class C shares starting early next year.

The fundraising spree comes at a critical time for the tech giant. Meta recently confirmed that it is on track to achieve capital spending in the range of $135 billion to $145 billion in 2026, roughly double the $72.2 billion the company spent last year.

Concerns about the company’s legal challenges and heavy AI spending have weighed on Meta, which has lost 16% over the past year. However, at 21 times earnings, the stock is pricing in a lot of downside potential.

For its part, Nvidia continues to post over 100% year-over-year growth in revenue and earnings, but sells for less than 28 times earnings.

Despite the risk of a potential slowdown in AI spending, these two industry titans are attractively priced.

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Danny Vena, CPA holds positions in Broadcom, Meta Platforms and Nvidia. The Motley Fool holds positions and recommends Advanced Micro Devices, Broadcom, Meta Platforms and Nvidia. The Mad Motley has a disclosure policy.

Nvidia just announced plans to pump billions into Meta’s Muse was originally published by The Motley Fool

Gn bussni

You can’t spell AI without Nvidia

Show me the money

Should You Buy Stocks on Meta Platforms Right Now?

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