S&P Global Ratings slashed Meta’s credit rating outlook to negative, citing a surge in leverage and AI spending that threatens the company’s financial footing—an action that could trigger a downgrade within two years.
The agency’s filing shows AI capital expenditure set at $140 billion for the current year, climbing from roughly $95 billion a year earlier, and forecast to exceed $225 billion by 2027. Leverage is projected to climb above 1.0 times next year, up from about 0.1 times last year, underscoring the strain on Meta’s balance sheet.
Meta’s chief financial officer, Susan Li, told analysts that the firm will keep investing aggressively to support both its core social media business and emerging AI initiatives. Despite the company’s spokesperson, Kamran Mumtaz, calling S&P’s assessment of AI monetisation "unfounded," Meta has disclosed more than $800 billion in future spending commitments, largely for data‑centre leases and energy infrastructure.
The rating shift came as the Nasdaq 100 slid 3.5% on Friday, briefly breaching correction territory after a string of disappointing technology earnings. Investors weighed the implications of Meta’s heavy AI outlays amid a broader tech slowdown.
Looking ahead, S&P warned that Meta’s free operating cash flow could remain negative and that a downgrade could materialise within the next couple of years. Meta’s CFO remains optimistic, signalling a continued focus on monetising AI, but the company’s debt‑to‑earnings profile and high capex trajectory keep analysts wary of long‑term credit risk.