Wall Street Breakfast Podcast: Meta's Credit Concerns
Derick Hudson/iStock Editorial via Getty Images Derick Hudson/iStock Editorial via Getty Images Download this episode onApple Podcasts/Spotifyor listen below: S&P cuts Meta's outlook oversoaring AI spend, low cash flow.
(0:17) Binancesees $3.64B flow outas withdrawals resume.
(1:23) OpenAI plans to rebrand data centers as ‘AI compute campuses.’ (2:06) S&P Global Ratings lowered its credit outlook on Meta Platforms (META)to Negative from Stable.
"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.
“This dramatic increase in the company's leverage, from about 0.1x in 2025, primarily stems from its strategy of leasing data center capacity (including its mega-data center projects Beignet and Sopaipilla) rather than from issuing debt,†analysts added.
S&P says the company's leverage could exceed 1.0x and free operating cash flow could remain negative for longer than expected if capex remains elevated and the monetization of its AI investments is delayed or fails to materialize.
Meta projected annual capital expenditures of $135B to $145B after reporting a $2.12B free cash flow deficit in Q3.
The company also plans to raise $97.5B through stock sales in public markets to finance its AI expansion.
Binance said itrecorded about $3.64B in net outflowsearly on Sunday as it resumed withdrawals following last week's massive $6.3B heist.
The world’s largest cryptocurrency exchange by trading volume began restoring withdrawals in phases on Sunday.
EST, Binance processed ~$4.65B in withdrawals and $1.01B in deposits.
That resulted in $3.64B in net outflows, about 2.1% of Binance's $171B in total assets under management.
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