S&P shifts Meta’s credit outlook to negative as AI spending strains cash flow
+1 new source since this summary was written
S&P Global Ratings revised Meta Platforms’ outlook to negative from stable on October 30, 2026, while keeping its AA- rating. S&P expects Meta’s capital spending to reach about $140 billion in 2026, more than $225 billion in 2027 and about $252 billion in 2028, alongside a $71 billion free operating cash flow deficit in 2027. Meta disputed S&P’s assessment of its AI monetization prospects.
Why it matters
The outlook change leaves Meta’s current AA- rating intact but signals that a downgrade could follow if leverage remains above 1.0 times and free operating cash flow stays negative beyond 2028, according to S&P. Meta’s planned AI investment would therefore face greater credit scrutiny and could require continued external financing if cash generation does not improve.
Key facts
- 1S&P kept Meta’s AA- rating but moved its outlook from stable to negative. ceoworld.biz
- 2S&P forecasts Meta’s capital expenditure at about $140 billion in 2026, more than $225 billion in 2027 and about $252 billion in 2028. ceoworld.biz
- 3S&P projects Meta’s free operating cash flow deficit will reach about $71 billion in 2027 and continue into 2028. ceoworld.biz
- 4S&P expects adjusted leverage to rise to 1.1 times EBITDA in 2027 and 1.3 times in 2028, and says it could downgrade Meta if leverage remains above 1.0 times on a sustained basis while free operating cash flow remains negative beyond 2028. ceoworld.biz
- 5Meta said it disagrees with S&P’s view of the company’s AI monetization capabilities. ceoworld.biz
Open questions
- Materials differ on S&P’s projected 2026 free operating cash flow deficit, reporting $22 billion in some accounts and $39 billion in another.
Summary written by AlphAI AI Desk from 17 of 17 sources. Not investment advice. Figures are as stated by the linked sources.