The cost of insuring Meta Platforms Inc. (NASDAQ:META) debt against default rose to a record Thursday as investors weighed the Facebook parent’s growing AI spending plans.
Meta’s five-year credit default swaps rose 7.6 basis points to a record 114.79 basis points, according to Markit data cited by Reuters.
The swaps work much like insurance on corporate debt, and a higher price means investors are paying more to protect against a default.
- META stock is tanking. See the real-time price action here.
55 Billion in Bonds
Meta has sold $55 billion of bonds in the past year. It raised $30 billion in October 2025, its largest bond offering, and $25 billion more in April 2026.
On Wednesday, the company raised the low end of its 2026 capital spending forecast to $135 billion and kept the high end at $145 billion.
Free cash flow was negative $2.12 billion in the third quarter, marking Meta’s first quarterly shortfall since 2012.
Meta also announced a new class of nonvoting Class C stock. According to Reuters, the company’s long-range forecasts call for raising hundreds of billions of dollars over several years to pay for its AI plans.
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Cash Cushion
Meta is not close to default. It had $82.45 billion in cash and marketable securities as of Sept. 30, and third-quarter revenue rose 26% to $64.60 billion.
Investors still want proof the spending will pay off.
"The market has been questioning whether all the spending on AI is having the type of returns that the market originally expected," Steve Sosnick, chief market analyst at Interactive Brokers, told Reuters.
Nvidia Corp. (NASDAQ:NVDA) CEO Jensen Huang told CNBC on Thursday that capital is tight across the AI industry. "The demand [for] the capital is much greater than the availability of the capital," he said.
Swaps on Oracle Corp. (NYSE:ORCL) also traded near a record, and those tied to Amazon.com Inc. (NASDAQ:AMZN) held near their highest level since March 2020, according to S&P Global Market Intelligence data cited by Reuters.
META Stock Price Activity: Meta Platforms shares are trading lower by 7.40% at $645.92 at the time of publication on Thursday, according to Benzinga Pro data.
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