S&P changes Meta's credit outlook to negative

S&P Global Ratings changed Meta's credit outlook from stable to negative on Oct. 30, citing uncertainty about the company's capital spending and free operating cash flow, Reuters reported. The AA- credit rating did not change.

Meta had forecast annual capital spending of $135 billion to $145 billion and reported a $2.12 billion free cash flow deficit for the third quarter, according to Reuters. S&P forecasts free operating cash flow deficits of $39 billion in 2026 and $71 billion in 2027. The agency said elevated spending could keep that measure negative beyond 2028. It also believes Meta's leverage could exceed 1.0 times as early as 2027, Reuters reported, crossing S&P's threshold for the AA- issuer rating. Those figures are forecasts, not reported results.

S&P questioned when revenue from Meta's AI investments would exceed their rising costs, according to CNBC. A Meta spokesperson told Reuters the company disagreed with S&P's assessment of its ability to earn revenue from AI and saw significant product and business opportunities ahead.