Meta Platforms’ AA- rating stayed intact Friday, but S&P Global Ratings moved its outlook to negative as the company’s AI buildout strains cash flow and leaves returns uncertain.
On Oct. 30, the agency left Meta’s long-term issuer rating at AA-. A negative outlook signals concern about a rating’s possible direction but does not lower it. S&P’s action record lists the local- and foreign-currency ratings at AA-.
S&P’s concern is whether Meta can turn its AI buildout into enough revenue to justify rising costs. The agency said Meta has yet to show the same capacity as its peers to translate AI investment into sales. It also said the timing of material AI-related revenue exceeding added costs remains uncertain, while spending could stay high and free operating cash flow negative.
For the quarter ended Sept. 30, Meta reported $34.91 billion in capital expenditures, including principal payments on finance leases, and $32.79 billion in operating cash flow. The company reported non-GAAP free cash flow of negative $2.12 billion.
Meta set its 2026 capital-expenditure forecast at $135 billion to $145 billion, also including finance-lease principal payments. The company said its 2027 budget and capacity plans were still in development and that it expected to continue investing in its core business and AI initiatives. It has not announced a 2027 capital-expenditure range.
Meta’s Form 10-Q listed two separate disclosures as of Sept. 30: $355.73 billion in obligations for leases not yet commenced and $454.52 billion in non-cancelable contractual commitments. The filing said most of the contractual commitments related to third-party cloud capacity, servers and network infrastructure, data-center energy agreements and Reality Labs hardware.
Meta said its AI work has started contributing additional advertising revenue, while it expects those investments to take longer to pay off than investments in its core business. S&P’s decision adds a company-specific case to its wider scrutiny of AI spending and related obligations among hyperscalers, which EconoTimes has covered previously. Meta said its 2027 budget and capacity plans remain in development.
