Meta Stock After S&P Cuts Its Outlook to Negative: AA-…
By Abdelaziz Fathi
AI summary of the source article
S&P Global Ratings revised Meta Platforms' credit outlook from stable to negative while affirming its AA- rating. The agency cited uncertainty surrounding elevated capital expenditure on artificial intelligence and pressure on free operating cash flow.
Why it matters
For Meta stock, the negative outlook adds a credit-market perspective to the valuation debate that has dominated technology trading throughout October.
Key facts
- S&P affirmed Meta's AA- rating but revised its outlook to negative due to AI capital expenditure and cash flow uncertainty.
- Meta reported negative quarterly free cash flow of $2.12 billion after spending $34.91 billion on capital expenditures and finance lease payments.
- S&P warned adjusted leverage could exceed 1.0 times as early as 2027, posing a downgrade risk if free operating cash flow remains negative beyond 2028.
Source excerpt · FinanceFeeds
Meta stock closed Friday, October 30, at $614.99, down 1.53%, before S&P Global Ratings announced that it had revised the company's credit outlook from stable to negative while affirming its AA- rating. The decision places fresh scrutiny on Meta Platforms' artificial intelligence spending and whether the company can generate enough cash from those investments to justify the scale of its expansion.…