Meta Credit Risk Warning Flares as CDS Spread Hits Record High on AI Spending Concerns

Meta Platforms (META) is drawing mounting bond-market warnings over its AI infrastructure buildout, with its five-year credit default swap spread widening to a record 114.79 basis points on Oct. 22, up 7.6 basis points in a single day. The stock fell more than 7% intraday before trading near $655.50, a roughly six-week low. Meta raised its 2026 capital expenditure forecast to $135 billion-$145 billion from $130 billion-$145 billion. Third-quarter revenue rose 26% year over year, but free cash flow turned negative at $2.12 billion — its first quarterly deficit since its 2012 IPO. Long-term debt stood at about $83.66 billion as of the end of June 2026, against $90.26 billion in cash, equivalents and marketable securities. Project-level financing is also drawing scrutiny. The Hyperion data center's Beignet Investor special purpose vehicle issued about $27 billion in secured notes at a 6.581% coupon maturing in 2049; those bonds have fallen to roughly 91 cents on the dollar, pushing the yield to about 7.55% and the spread over Treasuries to about 230 basis points. Meta disclosed roughly $347 billion in future data center lease commitments.