S&P Global Ratings forecasts that Meta Platforms Inc.'s S&P Global Ratings-adjusted leverage could rise to above 1.0x, our downgrade threshold for the'AA-'issuer credit rating, as early as 2027. 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. We also believe elevated capital expenditures could result in FOCF remaining negative beyond 2028. Therefore, we revised our outlook on Meta to negative from stable and affirmed the ratings. The negative outlook reflects our expectation that the company's leverage could exceed 1.0x and free operating cash flow (FOCF) could remain negative for longer than expected
