S&P Global cuts Meta's outlook to negative on AI spending and cash flow

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S&P Global Ratings downgraded Meta Platforms' outlook to "negative" from "stable" on Friday, citing uncertainty over its capital spending and free cash flow due to heavy AI investments. The ratings agency flagged Meta's eroding free cash flow, forecasting deficits of $39 billion in 2026 and $71 billion in 2027, with leverage potentially exceeding its "AA-" threshold by 2027. Meta's monetization of AI is seen as more limited than peers. Meta forecast annual capital expenditure of $135 billion to $145 billion and reported a $2.12 billion third-quarter free cash flow deficit. The company plans a $97.5 billion stock sale to fund AI infrastructure, while shares fell over 4% this week.


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