Meta outlook revised to negative by S&P on cash flow and capex concerns - CNBC

Meta has been assigned a negative outlook by S&P Global Ratings on concerns surrounding cash flow and AI spending.

The credit agency said Friday that the outlook reflects "uncertainty" surrounding Meta's elevated capex and its negative free cash flow.

Meta's credit rating has thus been reduced from AA- stable to AA- negative, the S&P Global Ratings said. S&Ps highest credit rating is AAA. Anything below BBB falls into the junk bond category.

The social media giant said in its third-quarter earnings report last week that it expects full-year capex to come in the range of $135 billion to $145 billion. The company also posted negative free cash flow of $2.12 billion, going in the red for the first time.

Investors sent Meta shares sinking 7% following last week's earnings report despite though the company beating on revenue. The stock finished October down 15%, its worst month in four years.

The company said on Monday that it plans to raise $95 billion to help fund its AI initiatives, with plans to first raise $35 billion in underwritten public equity offerings, followed by an additional $60 billion to be raised via an at-the-market program.

Meta didn't immediately respond to a request for comment.

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