A chasm has opened between Wall Street and S&P Global Ratings over how badly Meta Platforms (NASDAQ: META) will bleed cash during its AI infrastructure push.
S&P estimates Meta will run cumulative free operating cash flow deficits of $132 billion across 2026, 2027 and 2028, a figure that would comfortably exceed the company’s $82.45 billion cash reserve.
Analysts covering the stock arrive at a drastically different number, modeling a combined shortfall of just $61.32 billion over the same three years, an amount that would remain within Meta’s existing liquidity buffer.
The gap between those two projections, more than $70 billion, frames the central risk question now hanging over one of the largest companies in the world.
S&P moved first, revising its credit outlook on Meta to negative from stable on October 30, while keeping the AA- rating intact, signaling a formal warning rather than an immediate downgrade.
The agency said it could cut the rating outright if adjusted leverage remains above 1.0x and free cash flow is still negative beyond 2028, with the 2028 figure being the year the decision effectively hinges on.
Where S&P sees a $39 billion hole in 2028, Wall Street has Meta approaching breakeven, a divergence that will only be resolved when actual spending numbers arrive.
The warning came after a dramatic deterioration in Meta’s quarterly cash generation, with free cash flow sliding from $13.23 billion in the first quarter of 2026 to negative $1.16 billion by the third.
Capital expenditure drove that reversal, with Meta spending $33.94 billion on property and equipment in the third quarter alone, an 80% increase from $18.83 billion in the same period a year earlier.
Operating cash flow of $32.79 billion, a figure that would have looked healthy in almost any prior quarter, was no longer sufficient to cover the capital bill.
At the heart of S&P’s concern is a monetization argument: the agency stated that Meta’s ability to profit from AI investments is “more limited than that of its peers,” who generate direct cloud revenue from the same infrastructure.
Alphabet illustrates the contrast, posting negative free cash flow of $9.1 billion in its own third quarter, but simultaneously reporting that Google Cloud revenue more than doubled to $30.7 billion, providing a clear commercial return on the spending.
Meta pushed back directly, with a spokesperson telling Reuters, “We respectfully disagree with S&P’s assertion about Meta’s AI monetization capabilities.”
CFO Susan Li offered a more measured acknowledgment on the October 21 earnings call, saying that AI lab investments “will take longer to generate returns than those in our core business.”
The company’s actions since that call have reinforced rather than softened the financing concern, as Meta launched a $35 billion stock sale just five days after Li said there were no specific financing plans to announce.
That sale is part of a broader fundraising effort of up to $95 billion intended to support the AI buildout, an arrangement that implicitly concedes operations alone will not fund the ambition.
S&P forecasts Meta will spend roughly $140 billion in capital this year, rising to more than $225 billion in 2027 and $252 billion in 2028, while analysts model $209.69 billion and $227.23 billion for those same two years.
The lower end of Meta’s own 2026 capex guidance has already climbed from $125 billion in April to $135 billion, and Li indicated the company expects to continue investing aggressively in 2027.
The fourth-quarter earnings call, when Meta typically issues its annual capital spending outlook, will provide the clearest signal yet of whether S&P’s darker projections or the Street’s more moderate numbers better reflect management’s actual plans.
A 2027 capex figure above Wall Street’s $209.69 billion estimate would tilt the balance toward S&P’s math, and with it, toward a formal ratings cut for a company that closed October at $614.99 per share, already down 15% for the month.
