S&P Global Ratings downgraded Meta Platforms Inc.'s credit outlook to negative on October 30, 2026, while maintaining its AA- rating, citing risks from elevated artificial intelligence spending and negative free cash flow. S&P projected Meta's capex to hit $140 billion in 2026 and leverage to climb above 1.0 times in 2027. Meta reported Q3 negative free cash flow of $2.12 billion but rejected S&P's findings, pledging aggressive AI investment.
S&P credit rating decision for Meta
- ▪S&P Global Ratings revised Meta Platforms Inc.’s AA- credit rating outlook from stable to negative on October 30, 2026, signaling a potential downgrade within two years
- ▪S&P Global Ratings maintained Meta Platforms Inc.’s credit rating at AA-, the fourth-highest investment-grade score, and stated it is not currently considering an immediate downgrade
Meta's rising leverage
- ▪S&P Global Ratings cited Meta Platforms Inc.’s rising leverage as a key factor in its decision to downgrade the company’s credit rating outlook
- ▪S&P Global Ratings projected Meta Platforms Inc.’s leverage ratio could climb above 1.0 times in 2027, up from approximately 0.1 times in 2025
Reactions to monetization concerns
- ▪Meta Platforms Inc. spokesperson Kamran Mumtaz rejected S&P Global Ratings’ assessment, stating the company sees significant product and business opportunities ahead that support its credit profile
- ▪Wall Street investors have expressed hesitancy and pressed Meta Platforms Inc. on how it aims to make a return on its artificial intelligence investments
Meta AI investment and monetization plans
- ▪Meta Platforms Inc. Chief Financial Officer Susan Li stated during an earnings call that the company expects to continue investing aggressively in core operations and emerging artificial intelligence initiatives
- ▪Meta Platforms Inc. is planning monetization avenues for its artificial intelligence products including subscriptions, transaction fees, advertising, and selling access to cloud computing capacity
Meta capital expenditure and spending commitments
- ▪Meta Platforms Inc. disclosed over $800 billion in future spending commitments, with nearly half tied to unstarted leases for data centers and energy infrastructure
- ▪S&P Global Ratings forecasts Meta Platforms Inc.’s capital expenditure will reach $140 billion in 2026 and accelerate to over $225 billion in 2027
- ▪Meta Platforms Inc. stated in its third-quarter 2026 earnings report that it expects full-year 2026 capital expenditures to fall between $135 billion and $145 billion
Funding AI initiatives
- ▪Meta Platforms Inc. has been borrowing heavily to fund its business ambitions, according to S&P Global Ratings
- ▪Meta Platforms Inc. announced plans on October 26, 2026 to raise $95 billion to fund artificial intelligence initiatives through $35 billion in equity offerings and $60 billion via an at-the-market program
Third-quarter market performance
- ▪Meta Platforms Inc. reported a revenue beat in its third-quarter 2026 earnings report despite the subsequent 7% drop in its share price
- ▪Meta Platforms Inc. shares fell 7% following its third-quarter 2026 earnings report and finished October 2026 down 15%, its worst monthly decline in four years
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