S&P Global Ratings has revised Meta's credit rating from AA- stable to AA- negative, citing uncertainty regarding the company's ability to generate cash flow amid significant capital expenditures, projected between $135 billion and $145 billion for the year.
The agency expressed doubts about Meta's capacity to monetize its AI investments, particularly following the launch of its Muse AI agent app, which may not yield substantial revenue in the near term. Despite a revenue beat in its recent earnings report, Meta's shares fell 7%, marking a 15% decline for October, its worst monthly performance in four years.
In response to the negative outlook, a Meta spokesperson disagreed with S&P's assessment, emphasizing the company's strong credit profile and future business opportunities. Additionally, Meta plans to raise $95 billion to fund its AI initiatives, starting with $35 billion through public equity offerings.
S&P noted that while it anticipates a flattening of Meta's capital expenditure growth by 2028, there is uncertainty about the company's ability to reduce spending as previously expected