S&P Turns Negative on Meta as Big Tech’s AI Spending Nears $828 Billion

S&P Global Ratings revised its outlook on Meta Platforms to negative from stable on Friday, Oct. 30, 2026, while keeping the company’s AA- credit rating. The change to the Meta credit outlook adds a major rating agency’s voice to questions about the cost of Big Tech’s AI building spree. Across the five biggest spenders, 2026 capital spending plans add up to as much as $828 billion, according to a tally by Fortune.

Key figures: Meta rated AA-, outlook now negative · S&P sees cash-flow gaps of $39B (2026) and $71B (2027) · Meta 2026 capex guidance $135B-$145B · Big Tech 2026 capex up to $828B

What S&P said about Meta

In its report, S&P said it now questions “Meta’s ability to monetize its AI investments,” adding that “it is unclear when these revenue streams will generate material contributions that exceed their rising costs over the next few years,” CNBC reported. The agency also wrote that it is “less certain that it will curtail its spending as previously anticipated” and that it expects capex growth to start “flattening out beginning in 2028.”

S&P forecasts free operating cash flow deficits of $39 billion this year and $71 billion in 2027, Reuters reported. It expects Meta to cover the 2028 shortfall entirely with debt. Leverage could top 1.0 times as early as 2027, the level S&P has set as the limit for the current rating, compared with 0.1 times in 2025.

A Meta spokesperson pushed back. “We respectfully disagree with S&P’s assertion about Meta’s AI monetization capabilities,” the spokesperson said, according to CNBC. “We see significant product and business opportunities ahead of us, supporting our very strong credit profile.”

Why the cash picture changed

Meta reported negative free cash flow of $2.12 billion for the third quarter, its first negative quarter, CNBC said. A year earlier it generated $10.6 billion, according to Fortune, a swing of about $12.7 billion by TBR’s calculation. Long-term debt stood at $80.92 billion on Sept. 30, and the company has announced plans to raise $95 billion through a $35 billion underwritten stock sale and a $60 billion at-the-market program. The shares fell 15% in October, their worst month in four years. TBR covered the quarter itself in our Meta earnings report.

Meta is not the only company drawing scrutiny. S&P cut its outlook on Broadcom to stable from positive on Thursday. “If capex remains elevated and continues to grow at a faster pace than we expect, credit profiles will continue to weaken and cash flows will be negative,” S&P analyst Naveen Sarma said, according to Reuters.

Data: $828 billion and falling cash flow

Fortune’s tally puts 2026 capital spending at about $220 billion for Amazon, up to $205 billion for Alphabet, about $170 billion for Microsoft, up to $145 billion for Meta and up to $88 billion for SpaceX, which now includes xAI. Amazon alone accounts for 26.6% of the total and Meta for 17.5%, by TBR’s calculation. One caveat: CNBC reported that Microsoft finance chief Amy Hood gave the $170 billion figure as a target for calendar 2027, so the Microsoft bar reflects Fortune’s reading.

Alphabet shows how fast that spending eats into cash. Its free cash flow fell from $24.5 billion in the third quarter of 2025 to negative $9.1 billion a year later, a swing of $33.5 billion, according to TBR’s calculation from the company’s earnings release filed with the SEC. Purchases of property and equipment rose 114% to $51.4 billion over the same span, while operating cash flow slipped 12.6% to $42.3 billion. Our Alphabet stock report and Amazon earnings story cover the market reaction.

Markets and the debt question

On Friday the Nasdaq Composite fell 2.9% and the S&P 500 dropped 1.8%, both their worst days since June, and Nasdaq 100 companies lost more than $1 trillion in market value, Fortune reported. Microsoft sold $25 billion of bonds, its first such sale in more than nine years. Analysts at Evercore and Bank of America see AI capex reaching $1 trillion in 2027, about 21% above this year’s tally.

Boston College economist Aleksandar Tomic told Fortune that heavier borrowing could spread the risk beyond Silicon Valley. “If these tech companies sneeze, the rest of the market would catch pneumonia,” he said. “We do need infrastructure, we do need this capital, but, can they sustain it?”

Sources

• CNBC: Meta outlook revised to negative by S&P after cash flow turns negative (Oct. 30, 2026)
• Reuters via Investing.com: S&P Global revises Meta’s outlook to ‘negative’ on AI spending, cash flow worries (Oct. 30, 2026)
• Fortune: Fears over $828 billion AI capex spending spree help wipe $1 trillion from Nasdaq 100 (Oct. 31, 2026)
• Alphabet Inc. Form 8-K filings, including the Q3 2026 earnings release (Exhibit 99.1), U.S. Securities and Exchange Commission