# S&P Turns Meta's Outlook Negative Over AI Spending, Days After Its $25 Billion Share Sale and $12.5 Billion of Convertibles

Times of AI Desk · 2026-10-27 · Industry

[https://timesof.ai/2026/10/meta-95b-equity-raise-ai-infrastructure](https://timesof.ai/2026/10/meta-95b-equity-raise-ai-infrastructure)

> Updated Oct. 31: S&P Global Ratings revised Meta's outlook to negative from stable, citing uncertainty around its capital spending and free operating cash flow, and forecasts FOCF deficits of $39 billion in 2026 and $71 billion in 2027, Reuters reported; Meta says it disagrees with S&P's view of its AI monetization. Earlier, Meta priced $25 billion of stock at $625 and $12.5 billion of mandatory convertibles; a separate $60 billion program is still unagreed.

**Updated October 31, 2026:** S&P Global Ratings has revised Meta's outlook to negative. The new section directly below covers it; earlier updates follow unchanged.

## October 30: S&P moves Meta's outlook to negative

The equity raise did not settle the credit question. S&P Global Ratings revised its outlook on Meta to "negative" from "stable" on Friday, October 30, citing significant uncertainty around the company's capital spending and free operating cash flow, Reuters reported. S&P forecasts free operating cash flow deficits of $39 billion in 2026 and $71 billion in 2027, said elevated spending could keep it negative beyond 2028, and expects Meta to fund its 2028 shortfall entirely with debt, according to Reuters.

"Given the lack of clarity around the company's future capex and its very ambitious multi-year AI investment plans, we are less certain that it will curtail its spending as previously anticipated," S&P said, per Reuters. The agency said Meta's ability to monetize its AI investments is more limited than its peers', and that its leverage could rise above 1.0x as early as 2027, S&P's threshold for the "AA-" rating, Reuters reported.

"We respectfully disagree with S&P's assertion about Meta's AI monetization capabilities," a Meta spokesperson told Reuters. Meta reported long-term debt of $80.92 billion as of September 30, Reuters noted; the company narrowed its 2026 capital spending guidance to $135–145 billion with its [third-quarter results](https://timesof.ai/2026/10/meta-q3-nonvoting-class-c-stock-capex-135-145b-muse-10m). S&P also lowered its outlook on Broadcom to "stable" on Thursday, Reuters reported.

### Limits of the October 31 update

- S&P's own research note loaded only as a title for us; this section relies on Reuters' report as carried by CNA and Investing.com, which are the same story rather than independent checks.
- An outlook revision is not a rating change, and Reuters does not report any change to the rating itself.
- Reuters says Meta plans $97.5 billion of stock sales. That appears to combine the two priced offerings and the unagreed $60 billion program described below, but Reuters does not break it down.

**Updated October 28, 2026:** Added the final pricing of both offerings, Nvidia's and AMD's investments, and reported demand. The October 27 report follows unchanged.

## October 28: Priced at $625, with Nvidia and AMD buying in

Meta priced its Class A common stock offering at $625.00 a share and increased it to $25.0 billion from the $22.5 billion it launched, according to its pricing release. The shares are being sold in connection with forward sale agreements with affiliates of Morgan Stanley and Goldman Sachs covering 40 million shares, at an initial forward price of about $622.92. Meta says it expects net proceeds of about $24.9 billion, or about $28.7 billion if the underwriters' option is exercised in full, but only when it settles the agreements, which it says will happen on or before November 19, 2027.

Meta also priced 250 million depositary shares at $50 each, each representing a one-twentieth interest in a share of 6.50% Series A mandatory convertible preferred stock, for expected net proceeds of about $12.5 billion, or about $14.3 billion with the over-allotment option. Each preferred share is due to convert around August 15, 2029 into between 1.3620 and 1.6000 Class A shares, the release says, and Meta has applied to list the depositary shares under the symbol "METAM." Both offerings are expected to close on October 29.

Nvidia said it will invest $3 billion in the offering and AMD $1 billion, CNBC reports. CNBC says Nvidia's announcement also covers an expanded deployment of its Vera Rubin systems and Vera CPUs at Meta and closer work on Meta's Muse agent, and it quotes Mark Zuckerberg: "We're excited to keep working with NVIDIA to deliver the best personal agents and frontier models for billions of people." AMD said separately that its first Helios rack-scale systems "are installed and being tested by Meta," that its EPYC processors support Muse, and that it "will invest $1 billion in Meta's equity offering."

Quartz, citing Bloomberg, reports that orders for the common stock were about five times the shares on offer and that the 15 largest buyers took about 70% of the deal. It says Meta's shares slid by as much as 1.4% on October 27, to a low of $621.47; CNBC put the day's decline at about 1%.

### Limits of the October 28 update

- The demand figures are Bloomberg's, relayed by Quartz; Meta's release does not give them.
- The sources we read do not say whether Broadcom, which had also indicated interest, bought shares.
- Proceeds figures are Meta's estimates; the common-stock cash depends on when and how Meta settles the forward agreements.

The "up to $95 billion" in Reuters' report on Meta's equity plan is two different things: about $35 billion of offerings that launched on **October 26**, and about $60 billion of future share sales that Meta says it has not yet agreed with anyone. Reuters calls the combined plan Meta's largest-ever equity fundraising.

## What Meta launched

Meta's release describes two concurrent underwritten offerings. One is 250 million depositary shares, each representing a one-twentieth interest in a Series A mandatory convertible preferred share, together worth about $12.5 billion. The other is $22.5 billion of Class A common stock offered in connection with forward sale agreements with Morgan Stanley and Goldman Sachs affiliates.

Under a forward sale, Meta says it does not expect to receive proceeds initially from the shares the forward purchasers sell; it receives cash when it settles the agreements, which it says will happen on one or more dates on or before November 19, 2027. The preferred stock is due to convert automatically into a variable number of common shares around August 15, 2029, and its dividend rate and conversion terms are set at pricing. We did not find final pricing in the sources we read.

NVIDIA, AMD and Broadcom have indicated interest in buying up to $5 billion of the Class A shares in total, on the same terms as other buyers. Meta says those indications are not binding, and any of the three may buy more, fewer or no shares. Reuters says that interest adds to concerns about a circular flow of capital in the AI industry, in which chip suppliers help finance one of their biggest customers.

## What is still a plan

Meta says it intends to launch the roughly $60 billion at-the-market program once its previously announced Class C stock begins trading, which it does not expect before the first quarter of 2027. It says there is no assurance that it will set up the program on those terms or at all. [Our October 22 report on Meta's filing](https://timesof.ai/2026/10/meta-q3-nonvoting-class-c-stock-capex-135-145b-muse-10m) covers the Class C stock, which Meta said would take effect in January 2027.

## Why Meta says it is raising money

Meta says it expects $135 billion to $145 billion of capital expenditure in 2026 and plans to fund it with operating cash flow, investment-grade debt, strategic partnerships and equity. It says it generated $97 billion of operating cash flow in the first three quarters of 2026 and held about $82 billion of cash and marketable securities at the end of the third quarter. The release also cites Meta's own business figures in support, including more than 10 million Muse users in the U.S. and Canada in the early weeks of launch.

Reuters adds that the spending has eroded Meta's free cash flow, with a $2.12 billion cash burn in the third quarter, its first negative free cash flow in over a decade, against a positive $10.63 billion a year earlier. It quotes William Blair analysts saying investors will "continue to question the financing and potential for future capital raises," and that the financing "reinforces both Meta's confidence in the long-term returns from AI investment and the increasingly capital-intensive nature of pursuing that opportunity." Reuters reports Meta's shares fell about 1.4% in morning trading.

## Limits

- The $95 billion figure is Reuters' sum of a launched $35 billion and a planned $60 billion; Meta's release gives the two parts and does not state a total.
- Only the $35 billion of offerings has launched, and the common-stock portion brings in cash to Meta only on settlement of the forward agreements.
- Final pricing, the preferred stock's dividend rate and the amounts actually sold were not available in the sources we read.
- Meta's descriptions of its business and Muse usage come from its own financing release.
- We did not read the prospectus filed with the SEC.

## Sources

- [Reuters via CNA: S&P Global revises Meta's outlook to 'negative' on AI spending, cash flow worries (October 30, 2026)](https://www.channelnewsasia.com/business/sp-global-revises-metas-outlook-negative-ai-spending-cash-flow-worries-6508631)
- [Reuters via Investing.com: S&P Global revises Meta's outlook to 'negative' on AI spending, cash flow worries (October 30, 2026)](https://www.investing.com/news/stock-market-news/sp-global-revises-outlook-on-meta-to-negative-on-cashflow-concerns-4988756)
- [Meta Investor Relations: Meta Announces Launch of Offering of Depositary Shares and Offering of Class A Common Stock (October 26, 2026)](https://investor.atmeta.com/investor-news/press-release-details/2026/Meta-Announces-Launch-of-Offering-of-Depositary-Shares-Representing-Series-A-Mandatory-Convertible-Preferred-Stock-and-Offering-of-Class-A-Common-Stock-in-Connection-with-Forward-Sale-Agreements/default.aspx)
- [Reuters via CNA: Meta eyes record $95 billion equity raise to fund AI expansion (October 26, 2026; updated October 27)](https://www.channelnewsasia.com/business/meta-eyes-record-95-billion-equity-raise-fund-ai-expansion-6492931)
- [Meta Investor Relations: Meta Announces Pricing of Offering of Depositary Shares and Offering of Class A Common Stock (October 27, 2026)](https://investor.atmeta.com/investor-news/press-release-details/2026/Meta-Announces-Pricing-of-Offering-of-Depositary-Shares-Representing-Series-A-Mandatory-Convertible-Preferred-Stock-and-Offering-of-Class-A-Common-Stock-in-Connection-with-Forward-Sale-Agreements/default.aspx)
- [CNBC: Nvidia, AMD to invest $4 billion in Meta as tech giants deepen AI partnership (October 27, 2026)](https://www.cnbc.com/2026/10/27/nvidia-invest-meta.html)
- [AMD Newsroom: AMD, Meta Advance Partnership to Power Meta's Infrastructure (October 27, 2026)](https://newsroom.amd.com/news/amd-meta-advance-strategic-partnership-power-metas-ai-infrastructure/)
- [Quartz: Meta $25 billion stock offering draws about five times demand (October 27, 2026)](https://qz.com/meta-25-billion-stock-offering-demand-five-times-102726)
- [Times of AI: Meta's Filing Makes 20% of Zuckerberg's New Class C Shares Freely Saleable and Ties the Rest to His Voting Stock (October 22, 2026)](https://timesof.ai/2026/10/meta-q3-nonvoting-class-c-stock-capex-135-145b-muse-10m)