- META
- SPGI
Quick Read
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S&P kept META at AA- but flipped its outlook to negative, saying AI monetization is “more limited than that of its peers.”
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S&P projects Meta’s leverage will hit 1.3x by 2028, past the 1.0x downgrade threshold, with the shortfall funded “entirely with debt.”
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Meta raised $37.5 billion through stock and convertible preferred, then launched a $60 billion share program starting January 2027.
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On October 30, 2026, S&P Global Ratings maintained Meta Platforms (NASDAQ:META) at AA- and revised its outlook from stable to negative. S&P pointed to uncertainty about elevated capital spending and negative free cash flow, writing: “Meta’s ability to monetize its AI investments is more limited than that of its peers.”
The shares fell 1.53% to close at $614.99, a market value of $1.36 trillion, and traded at $614.43 after hours. That close sits 1.6% below the $625 price Meta charged for new stock on October 26.
October was already Meta’s worst month in four years, down 15.2% from a $725.18 close, including a 6.98% drop on October 22. The ad business is growing fast, but the AI bill is growing faster, and shareholders now cover part of it.
What S&P Kept and What It Flagged
S&P left the rating unchanged, and AA- remains among the highest credit ratings in tech, while a negative outlook is a formal warning that a downgrade becomes possible if the agency’s forecast holds.
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S&P wrote that “it is unclear when these revenue streams will generate material contributions that exceed their rising costs over the next few years.” Meta’s payback has to come through ads, engagement, and products still being built, because its model relies on its own apps rather than cloud-style computing rentals to outside customers.
Spokesperson Kamran Mumtaz replied, “We respectfully disagree with S&P’s assertion about Meta’s AI monetization capabilities,” adding, “We see significant product and business opportunities ahead of us, supporting our very strong credit profile.”
