AI chip stocks rebound as Meta's funding gap looms over hyperscaler earnings

AI chip stocks rebounded on October 19, with the Nasdaq rising 1.3% as NVIDIA gained 1.38%, while Meta Platforms slipped 0.55%, highlighting a split between the GPU seller and the cash-strapped hyperscaler buyer. Meta's 2026 capital expenditure guidance of $130-145 billion clashes with its second-quarter free cash flow falling to $784 million from $8.55 billion a year earlier, while NVIDIA reported $96.22 billion in quarterly revenue, up 105.8%. Evercore ISI expects strong hyperscaler earnings ahead, and analysts anticipate a Meta stock sale, with the market comfortable with a $30 billion offering. GPU-backed loans are becoming the default financing option, as unsecured debt near 15% is less desirable, and older NVIDIA chips like the H100 have held their value, supporting their use as loan collateral. Meta's expected equity raise size remains the key question, with dilution and an open-ended spending cap limiting upside for existing shareholders.