S&P Global Ratings on October 31, 2026, revised its outlook on Meta Platforms to negative from stable while affirming the company's AA- long-term credit rating. The agency cited surging artificial intelligence costs, prolonged high capital expenditures, and continued negative free operating cash flow as key risks to Meta's financial flexibility.
S&P said it is unclear when Meta's infrastructure investments will generate enough revenue to offset rising expenses, noting that Meta has fewer direct monetization paths for AI than big tech rivals with cloud businesses. Meta pushed back, with spokesperson Kamran Mumtaz saying the company "respectfully disagrees" and sees "significant product and business opportunities ahead."
Meta's Q3 results showed adjusted earnings of $7.40 per share, up 2.1% year-over-year and 13.5% above consensus, while revenue rose 26% to $64.6 billion, beating estimates by 1.88%. Advertising volume grew 10% and pricing power rose 14%. However, Meta posted a negative free cash flow of $2.12 billion and projected full-year capex of $135 billion to $145 billion. S&P expects capex to reach about $140 billion in 2026 and exceed $225 billion by 2027, potentially pushing leverage above 1.0x from roughly 0.1x last year.
Meta still held $82.45 billion in cash and marketable securities and generated $32.79 billion in operating cash flow in Q3, but long-term debt stood at about $80.92 billion. To fund data center expansion, Meta plans to raise up to $95 billion through stock sales, starting with deals worth $35 billion. Nvidia, Advanced Micro Devices, and Broadcom have shown preliminary interest in buying up to $5 billion in shares. The plan includes $12.5 billion in Series A depositary shares and a later at-the-market program of about $60 billion.
