LI SUSAN J sold $5.1M of META (indirect holdings)

S&P revised Meta's credit outlook to negative, citing concerns over its AI investments and uncertain profitability. Meta's free cash flow turned negative in Q3, with $2.1B spent on investments exceeding operational earnings. The company plans $145B in capital expenditures this year, with a projected $71B cash shortfall next year. Meta disputes S&P's assessment, but market concerns persist.

Rhode Island sued Meta, alleging the company profited from scam ads on its platforms, with about 10% of its 2024 revenue ($16B) coming from such ads. The lawsuit claims Meta actively collaborates in creating and targeting ads, including scams. Meta disputes the allegations, stating it removed millions of scam ads in 2025 and is enhancing its detection tools.

France's National Assembly voted to tax US companies €0.055 per GB of data sent to French users, targeting firms like Google, Meta, Amazon, Netflix, and Akamai. The measure, part of the 2027 budget, aims to generate €10B annually. It requires ISPs to track data flow and report to tax authorities. The tax must pass further budget approvals to become law.

The Nasdaq Composite fell 2.86% on Friday, led by selloffs in Alphabet (down 12%) and Intel (down 28%), exposing concentration risk in tech-heavy indices. The S&P 500 also dropped 1.8%, while the equal-weighted RSP ETF gained 5% in October. Investors are concerned about AI spending and slowing growth in core businesses. Nvidia, Apple, and other tech giants saw significant declines, with Nvidia losing its title as the world's most valuable company.

Amazon, Alphabet, and Meta reported significant negative free cash flow in Q3 2026 due to high AI spending and weaker revenue growth. Amazon's free cash flow was -$42.4B, Alphabet's -$9.1B, and Meta's -$2.12B. Their shares fell 10%, 12%, and 10% respectively. Microsoft, however, reported positive free cash flow of $18.6B despite AI investments.

S&P lowered Meta's credit outlook to negative, citing rising leverage and uncertainty around AI investment returns. Meta disputes S&P's view, forecasting $140B in 2024 capex and $225B in 2025. The company's leverage may exceed 1.0x next year, up from 0.1x in 2023.