Meta’s Credit Rating Outlook Downgraded to Negative by S&P

(Bloomberg) -- S&P Global Ratings slashed Meta Platforms Inc.'s credit outlook to negative on Friday, citing growing pressure on the tech company's balance sheet stemming from elevated capital expenditures for artificial intelligence.

"In our view, Meta's ability to monetize its AI investments is more limited than that of its peers," the agency said in a statement, adding that it's not clear when its expenditures will start producing material revenue that exceed the rising costs.

The downgrade comes as investors scrutinize Meta and other industry players' ability to generate tangible returns from the massive investments they have been plowing into AI. The Nasdaq 100 fell 3.5%, briefly crossing the threshold of a technical correction on Friday, weighed down by disappointing tech earnings.