S&P moves Meta's credit outlook to negative on rising AI spending

what happened

S&P Global Ratings said it could downgrade Meta Platforms' credit rating within two years. The agency changed its outlook on the company's AA- rating to negative, as heavy artificial intelligence spending weighs on its finances. It also pointed to Meta's rising leverage, which measures debt relative to earnings. TradingView reported the move, citing the agency's statement and a Bloomberg report.

S&P argued that Meta has less room than its peers to turn AI investments into revenue, and that it is unclear when that spending will cover rising costs. The agency expects capital expenditure of $140 billion this year and more than $225 billion in 2027, and leverage could rise above 1.0 times as early as next year. Meta spokesperson Kamran Mumtaz disagreed: "We see significant product and business opportunities ahead of us, supporting our very strong credit profile."

The move comes as investors question whether big technology companies can earn real returns from their large AI building programs. The Nasdaq 100 fell 3.5% on Friday.

why it matters

A negative outlook does not mean a downgrade has started, but it signals a possible deterioration in credit quality. The AA- rating remains high investment grade, so even a one-notch cut would keep Meta in that category. For investors, the broader trend matters more: rising debt tied to large AI spending could weigh on the bonds of major technology companies.

market impact

Meta bonds: negative outlook raises downgrade risk and pressures the debt

• ▼Meta bonds pressure down — a negative outlook raises downgrade risk and borrowing costs

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