US stocks sink on June 5

Research evidence excerpt

US stocks sink on June 5

AI Giants reportedly to raise funds again, stoking market concerns about cash flow, liquidity

Alphabet raises US$85bn; Meta evaluates refinancing of tens of US billions for Meta refinances for creative diversification

• Alphabet announced a massive US$85bn equity financing plan in June, including common stock, convertible preferred stock, a US$10bn private placement subscription from Berkshire Hathaway, and a

subsequent US$40bn ATM offering mechanism. As corporate and consumer demand for AI computing power far outstrips current supply, Alphabet plans to leverage these raised funds primarily for building

infrastructure such as AI data centers.

• Meta raised its FY26 capex guidance to US$125-145bn, mainly for building data centers, next-generation AI models, and new services after its recent earnings call. Following Alphabet’s fundraising move, recent

market rumors suggest Meta is also evaluating a new share issuance to raise tens of billions of US dollars, following Alphabet's fundraising move

• In the past, big tech relied primarily on operating cash flow and debt financing for investment fund. Their recent move is to tap the equity markets further to fund massive capex plan even after reporting stellar

1Q26 financial results. This has raised market concerns. First, the anticipated capex expansion might prolong the investment payback period (ROI). Second, it could dilute equity and profitability. As their stock

prices are at record highs, the market will inevitably reassess ROI and liquidity capabilities in terms of AI monetization.

Cash flow forecasts of major CSPs Unit: US$100mn

Capex plans of major CSPs Unit: US$100mn

Source: Bloomberg, Fubon Research

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