Tech & AI
Meta slides as S&P turns negative on its credit outlook
Meta shares slid 1.3% on Monday after S&P Global Ratings put a negative outlook on the company's credit rating, flagging rising debt and heavy AI spending.
Quick Read
- S&P Global Ratings cut the outlook on Meta's AA- rating to negative, a signal that a downgrade could follow.
- Meta shares slid 1.3% to $606.73, below the $625 price of its recent stock sale.
- S&P sees Meta's capital spending topping $225 billion in 2027, up from about $140 billion in 2026.
- Meta told Bloomberg its credit profile remains very strong.
What did S&P Global Ratings change?
S&P Global Ratings left Meta's AA- credit rating in place but cut its outlook to negative. A negative outlook is a warning that a downgrade could follow.
Why it matters: Meta shares slid 1.3% on Monday to close at $606.73, down from $614.99 the session before. Meta lost $18 billion in market value on the day.
By the numbers: The stock now sits 22.0% below its 52-week high of $777.59. In after-hours trading, the shares rose 0.3% to $608.80.
Why is S&P worried about Meta's spending?
S&P pointed to rising debt and to doubts over how long AI spending could keep free cash flow negative. Free cash flow is the cash left after running and investing in the business.
The rating firm sees Meta's capital spending, the money it puts into buildings and equipment, at about $140 billion in 2026. S&P puts that figure above $225 billion in 2027.
Meta has also raised cash from shareholders. It recently completed a $25 billion stock sale at $625 a share, and it keeps a program in place to sell more stock over time. Monday's close left the shares below that sale price.
How did Meta respond, and what comes next?
What’s next: Meta pushed back. Its spokesperson Kamran Mumtaz told Bloomberg that the company's credit profile remains very strong.
Tech stocks broadly lost ground on Monday. The Nasdaq-100 slid 1.4% and the technology sector fund (XLK) slid 2.9%. The S&P 500 fell 0.5%.
The open question is whether Meta's AI build-out starts producing cash before its debt climbs further. A lower rating could raise what Meta pays to borrow. For the wider market, fresh data could move Treasury yields: the October jobs report on Nov. 6 and the Consumer Price Index, a key inflation gauge, on Nov. 10. Those yields shape borrowing costs for big spenders.
For readers
What it could mean for you: If you own Meta shares directly, the rating news lands in full, with no other holdings to cushion it. The stock's path may hinge on whether its AI spending starts turning into cash. A downgrade, if S&P follows through, could raise Meta's borrowing costs. More stock sales under its existing program could spread the company's profits across more shares. Either could weigh on what your shares are worth. Stronger cash flow could ease S&P's concern.
Questions and answers
Why did Meta stock fall on Monday?
S&P Global Ratings moved its outlook on Meta's credit rating to negative. The firm cited rising debt and uncertainty over how long heavy AI spending could keep free cash flow negative. The shares slid 1.3%.
What does a negative credit outlook mean?
It is a warning from a rating firm that it could lower the rating itself. S&P left Meta's AA- rating in place but signaled that a cut is possible.
How much does S&P think Meta will spend on AI and equipment?
S&P sees Meta's capital spending at about $140 billion in 2026, climbing above $225 billion in 2027.
How did Meta respond to the S&P outlook cut?
Meta pushed back. Its spokesperson Kamran Mumtaz told Bloomberg that the company's credit profile remains very strong.
The numbers
| Meta Platforms (META) price | $606.73 |
|---|---|
| Meta Platforms (META) change | −1.34% |
| Meta Platforms (META) market value | $1.3 trillion |
| Meta Platforms (META) 52-week high | $777.59 |
| S&P 500 change | −0.51% |
| 10-year Treasury yield | 4.91% |
Monday’s close
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