S&P Global Ratings has revised its outlook on Meta Platforms to negative from stable, citing uncertainty over the company’s rising capital expenditure and free operating cash flow as it continues to invest heavily in artificial intelligence infrastructure.
The revision, announced on October 30, 2026, comes as Meta increases spending on advanced chips and data centres to strengthen its position in the AI market. The investment has put pressure on the company’s cash flow and raised questions about how quickly it can generate returns from its AI-related expenditure.
Meta had forecast annual capital expenditure of between $135 billion and $145 billion for 2026. The company reported a free cash flow deficit of $2.12 billion in the third quarter, compared with positive free cash flow in the year-ago period. It is also planning to raise $97.5 billion through a stock sale to support its AI infrastructure expansion.
S&P Global said Meta’s ability to monetise its AI investments was more limited than that of its peers. The agency also said it remained unclear when the company’s revenue streams would generate material contributions that exceed the rising costs of these investments.
S&P forecasts that Meta will record free operating cash flow deficits of $39 billion in 2026 and $71 billion in 2027. It expects elevated spending to keep free operating cash flow negative beyond 2028 and projects that the company will fund its 2028 cash shortfall entirely through debt.
“Given the lack of clarity around the company’s future capex and its very ambitious multi-year AI investment plans, we are less certain that it will curtail its spending as previously anticipated,” S&P Global said.
The ratings agency also expects Meta’s leverage could rise above 1.0x as early as 2027, a threshold associated with its AA- issuer credit rating.
Meta disputed S&P’s assessment of its ability to generate returns from AI investments. A company spokesperson told Reuters, “We respectfully disagree with S&P’s assertion about Meta’s AI monetization capabilities,” adding that Meta sees “significant product and business opportunities ahead of us, supporting our very strong credit profile.”
Meta reported long-term debt of $80.92 billion as of September 30. Its leverage increased from 0.1x in 2025, primarily because the company has been leasing data-centre capacity rather than issuing debt, according to S&P.
Naveen Sarma, US media and telecom sector lead at S&P Global Ratings, said, “If capex remains elevated and continues to grow at a faster pace than we expect, credit profiles will continue to weaken and cash flows will be negative.”
The revised outlook reflects the rating agency’s concerns about the financial pressure that Meta’s expanding AI infrastructure
