S&P Global Ratings revised its outlook on Meta Platforms to negative from stable on October 30, citing uncertainty over the scale and duration of the company's capital spending on artificial intelligence infrastructure and the resulting pressure on free operating cash flow.

The AA- long-term issuer credit rating itself remains unchanged and continues to sit well within investment-grade territory. The outlook change signals a higher likelihood of a future downgrade if leverage rises and cash generation stays negative for an extended period.

Cash Flow Projections and Capital Plans

S&P now projects free operating cash flow deficits of $39 billion in 2026 and $71 billion in 2027. The agency said elevated spending could keep free operating cash flow negative beyond 2028 and expects Meta to fund its 2028 shortfall entirely with debt.

The revised assessment follows Meta's third-quarter results, which showed revenue of $64.6 billion, up 26 percent from a year earlier. Capital expenditures reached $34.91 billion in the quarter, and free cash flow turned negative by $2.12 billion, compared with a positive $10.63 billion in the same period of the prior year.

Meta has guided for full-year capital expenditures of $135 billion to $145 billion, an increase at the lower end of its previous range. The spending supports data centers, chips and computing capacity needed for advanced AI models.

Leverage Threshold and Balance Sheet Position

S&P anticipates that Meta's adjusted leverage could exceed 1.0 times as early as 2027. That level serves as a key threshold for the current AA- rating. Leverage stood near 0.1 times in 2025. Long-term debt totaled approximately $80.92 billion at the end of September, while cash, cash equivalents and marketable securities stood at $82.45 billion.

The agency noted that Meta's ability to monetize its AI investments appears more limited than that of peers that operate large cloud businesses. It remains unclear when new revenue streams will generate contributions that exceed the rising costs over the next several years.

Company Response

Meta disputed the assessment. A company spokesperson stated that management sees significant product and business opportunities ahead that support a very strong credit profile and disagreed with the view on monetization capabilities. Management has pointed to gains in advertising recommendation systems and monetization efficiency already visible in the core business.

The outlook revision arrives amid a broader pattern among large technology firms that have reported negative free cash flow after accelerating infrastructure investments. Similar cash-flow pressure has appeared in recent results from other major platform companies funding data-center expansion.

S&P indicated that capital expenditure growth may begin to flatten starting in 2028, yet the agency expressed reduced confidence that spending will moderate as earlier forecasts had assumed. The negative outlook places increased focus on Meta's future borrowing needs and the pace at which AI-related revenue can offset the infrastructure outlays.