S&P changed their outlook on $META to negative today, which means they could cut Meta’s credit rating. A big part of the reason is the rent from the data center leases I wrote about here. Free cash flow doesn’t show that rent yet but S&P counts it as debt. They say Meta’s debt could be too high for their rating as early as 2027. Meta’s free cash flow was less negative than Amazon, Alphabet and Oracle in Q3 and S&P is still worried about how much they are taking on. Microsoft has signed about the same amount in these leases but they can rent that capacity out to Azure customers. Meta is still working on renting theirs out, so their ads are paying for most of it.