S&P Global Ratings revised Meta's outlook to negative from stable, citing uncertainty around capital spending and free operating cash flow. It forecasts deficits of $39 billion in 2026 and $71 billion in 2027, after Meta forecast 2026 capital expenditure of $135 billion to $145 billion.
S&P Global Ratings revised its outlook on Meta Platforms to negative from stable, citing significant uncertainty around capital spending and free operating cash flow. The agency said Meta's ability to monetize AI investments is more limited than that of its peers, and it is unclear when revenue from those investments will materially exceed their rising costs.
Meta forecast annual capital expenditure of $135 billion to $145 billion after reporting a $2.12 billion free cash flow deficit in the third quarter, compared with positive free cash flow a year earlier. S&P forecasts free operating cash flow deficits of $39 billion in 2026 and $71 billion in 2027, and said spending could keep free operating cash flow negative beyond 2028. It said leverage could rise above 1.0x as early as 2027, its threshold for the AA- issuer credit rating. Meta recently said it plans to sell $97.5 billion in stock to fund its AI infrastructure expansion.
