Poland Builds European Case Against Meta Over Fraudulent Ads

S&P Global Ratings maintained Meta Platforms' AA- rating but revised its outlook to negative, citing uncertainty over capital spending and AI monetization. Shares fell 1.53% to $614.99, with a market value of $1.36 trillion. S&P forecasts increased capex and negative free cash flow through 2028, raising leverage concerns. Meta disputes S&P's assessment, highlighting growth opportunities.

France's National Assembly passed a 5.5 euro cent per gigabyte tax on content providers like Netflix, Google, and Meta, with a 15% or 2% revenue cap. The tax aims to raise about $11.2 billion annually, but its future is uncertain. Netflix, Alphabet, and Meta's stocks showed minor movements unrelated to the vote.

OpenAI reduced its fundraising target to $20B, lowering its valuation to $1.25T. Anthropic, a rival, filed for an IPO, showing positive cash flow. Meta received a credit warning from S&P Global due to negative cash flow and high spending plans, with capex expected to reach $140B this year. Microsoft reported strong cloud growth but increased capital spending. AI chip maker SK Hynix exceeded earnings forecasts.

S&P revised Meta's outlook to negative, citing high AI capex forecasts of $225bn in 2027 and $252bn in 2028, up from earlier estimates. It expects free cash flow deficits of $22bn, $71bn, and $39bn for 2026-2028, respectively. The agency warns Meta's debt may exceed its downgrade threshold due to data center leases.

France's National Assembly voted 11-10 to impose a €0.055 per gigabyte tax on data traffic from companies like Google, Meta, Amazon, Netflix, and Akamai, aiming to raise €10 billion. The tax would be measured by internet providers and capped at 15% of French revenue or 2% of total revenue. The government opposes the measure, and the bill remains in early stages of the budget process.

Meta Platforms' stock fell 12% post-Q3 earnings despite revenue of $64.6B and EPS of $3.83. The drop followed a $135B-$145B capex plan, negative free cash flow of $2.1B, and a new non-voting stock class. Analysts estimate a $95B equity raise, impacting 2027 EPS forecasts. Meta plans to fund AI initiatives with new shares and reallocated investment.