Meta Sells $35 Billion of Stock for AI, and SPX Gaps Into Friday's High

Meta is selling $35 billion of stock to pay for AI. About $22.5 billion is common sold on forward contracts and the rest is mandatory convertible preferred, and up to $60 billion more could follow next year through an at-the-market program once its new Class C shares trade. Nvidia, AMD and Broadcom, three of its own chip suppliers, have shown interest in buying up to $5 billion of it. Oil eased after Qatari mediators went to Tehran with Washington's backing, and Saudi, Turkish and Pakistani officials are due there today. SPX closed Friday at 7,623.68, down 0.52%, with the Dow down 1.2%. Premarket 7,652.

Thursday Jensen Huang said the neoclouds' demand for capital is much greater than the supply. Four days later one of the biggest spenders in AI is raising its own from shareholders, and the chipmakers paid out of that capex want to fund part of it. The tape isn't punishing it. Meta is a touch higher premarket and the three suppliers are each up about 1%, while CoreWeave is down another 2%, so whatever funding worry is left sits with the neoclouds. December Brent is near $115, off about 1%, and WTI is back near $101. The Fed decides Wednesday with a hold priced and Microsoft and Alphabet reporting that night, and Thursday brings GDP, September PCE, Amazon and Intel. Today has only the Chicago and Dallas Fed reports.

The profile is lighter than last week's, about 2.4 to 1 negative, and premarket sits 3 under the 7,655 flip with the 7,660 call wall right on top of it. That wall is the biggest positive strike on the day and it's also Friday's high, with Thursday's 7,663 close just above. Past it two small negatives give way to a positive band from 7,675 to 7,695, so a clean break of 7,670 gets pulled toward the 50-day near 7,700 and the move should be orderly. Under the flip every strike is negative and thin until the 100-day at 7,600, so drops can travel. The 7,565 put wall sits on the 21-week, with the heaviest negative block of the day from 7,565 to 7,580.

Pops into 7,660 are for selling, where the call wall, Friday's high and Thursday's close all meet, for prior demand 7,631 and then Friday's 7,612 low. A hold over 7,670 ends the short and opens the band up to 7,700. The long trade is at 7,600 with the 100-day on it, not the gap.