3 Stocks Diluting Shareholders to Fund Big Long-Term Opportunities

Key Points

• Investors can often see share issuance in a negative light, as companies dilute their stakes.
• However, share issuance also gives companies firepower to pursue growth.
• One NVIDIA-backed firm and two others are issuing shares to this end, with real market opportunities ahead.

Many investors are aware of the benefits that buybacks can provide to shareholders. As companies reduce their outstanding shares, each remaining share accounts for a higher percentage of the firm’s value, helping to buoy prices.

Share issuance is the opposite of buybacks. As companies issue more shares, they receive cash in return, but also dilute existing shareholders. Because of dilution concerns, share issuance should be monitored, but it is certainly not always a bad thing. If cash received is invested in growth initiatives, the long-term payoff can outweigh the dilution. Coherent NYSE: COHR, AST SpaceMobile NASDAQ: ASTS, and Welltower NYSE: WELL are three companies taking this approach, issuing large amounts of stock to chase opportunities.

Coherent: Dilution at the Hands of an NVIDIA-Backed Opportunity

Coherent is an optical artificial intelligence networking company. As data center buildouts progress, traditional copper-based networking solutions are becoming increasingly strained. With this, fiber-optic solutions like those Coherent provides are seeing a significant uptick in demand. The company posted record revenue of $1.8 billion in its latest quarter, while also seeing its backlog hit a record. Overall, Coherent shares are up more than 100% in 2026.

Notably, Coherent issued $2 billion worth of stock last quarter, with the buyer being none other than NVIDIA NASDAQ: NVDA. The two companies have formed a strategic partnership, with Coherent supporting NVIDIA’s optical networking roadmap.

This is a solid example of when share issuance makes sense. The deal added around 7.8 million shares to Coherent’s outstanding share count, leading to dilution of approximately 4%. This is relatively small in comparison to the long-term benefit of partnering with the world’s biggest name in artificial intelligence.

Coherent is investing heavily in relation to its partnership with NVIDIA. It spent more than $650 million on capital expenditures over the last 12 months. This pushed the firm’s free cash flow to -$538 million. However, Goldman Sachs estimates that the total addressable market for optical networking is $154 billion. In light of this, share issuance is a reasonable path forward as Coherent looks to execute on this huge opportunity.

AST SpaceMobile: Issuing Shares as It Chases Starlink

AST SpaceMobile NASDAQ: ASTS has garnered a lot of investor attention through its pursuit of low-earth orbit satellites for telecommunication. However, launching and maintaining satellites is very capital-intensive, and the company has leaned heavily on share issuance to fund its ambitions. The company issued almost $700 million worth of shares last quarter and has issued almost $3 billion worth of stock in the last 12 months.

This has led to significant shareholder dilution, with the company’s outstanding share count rising around 25% since last June. Still, this makes sense for a company that has yet to generate much revenue.

Despite sales rising over 1900% in its latest quarter, overall sales were just $14.74 million—tiny in comparison to its market capitalization near $30 billion. In turn, AST SpaceMobile is burning a lot of cash, with free cash flow coming in at -$1.3 billion over the last 12 months.

However, SpaceX NASDAQ: SPCX has shown that there is a real opportunity in satellite communications. The firm’s Starlink offering generated $11.4 billion of revenue in 2025. Additionally, estimates place Starlink’s operating margin near 40%, showing that it is feasible to build a very profitable satellite business like AST SpaceMobile hopes to do.

Welltower Targets Aging Population Opportunity Through Dilution

Welltower is in a different situation than Coherent and AST SpaceMobile, already being a profitable business. The company is a huge player in the senior living industry, owning more than 2,000 senior and wellness housing communities.

The U.S. population is clearly aging, a dynamic that plays right into Welltower’s hand. The U.S. Census Bureau noted that from 2001 to 2025, America’s median age increased from 35.6 years to 39.4 years. This is a key tailwind for Welltower, which has delivered a total return of more than 65% since the start of 2025.

Notably, the company’s free cash flow over the last 12 months was $2.95 billion. However, over that period, Welltower also issued nearly $8.5 billion worth of shares. This has led the firm’s share count to rise by around 8%. However, these funds are supporting its ability to invest heavily back into the business. Welltower has made more than $13 billion worth of acquisitions in the last 12 months. The Congressional Budget Office projects that growth in the 65-and-older age group will continue to outpace younger groups through 2055. Thus, issuing shares to expand its properties in this market is a sensible strategy for Welltower.

Welltower Highlights the Case for Opportunity-Driven Issuance

Overall, Coherent, AST SpaceMobile, and Welltower are all issuing shares to pursue what they see as large long-term opportunities. Welltower’s long-term opportunity appears particularly durable. Multi-decade trends and forecasts indicate that the changing age demographics in the U.S. are structural—and Welltower is in a strong position to benefit from this.