S&P Cuts Meta Outlook to Negative Over AI Spending

S&P Global Ratings has revised Meta's outlook from stable to negative. The decision reflects concerns regarding the company's free cash flow and high levels of capital expenditure.

The company's credit rating remains at AA- but now carries a cautious outlook. The agency questions Meta's ability to monetize its artificial intelligence investments in the face of rising costs.

In the third quarter, the company reported a negative free cash flow of 2.12 billion dollars. Meta projects capital expenditures between 135 billion and 145 billion dollars for the full year.

Meta disputes the agency's assessment of its ability to generate revenue from new technologies. The company maintains that it has a solid credit profile and sees significant future business opportunities.

To fund its artificial intelligence initiatives, the company plans to raise 95 billion dollars. This amount will be obtained through public stock offerings and market sales programs.