On Thursday, Meta Platforms’ five-year credit default swap (CDS) spread climbed to a record level after the company raised the lower end of its 2026 capital expenditure guidance. Meta adjusted its annual capex range from $130–145 billion to $135–145 billion. According to Markit data, the company’s five-year CDS spread jumped 7.6 basis points to 114.79 basis points, an absolute record, and the one-day move was the largest seen since at least 2025.
The stock also tumbled, falling more than 6% on Thursday to a six-week low. In its quarterly report published yesterday, Meta introduced a non-voting share class and reported negative free cash flow of $2.12 billion for the third quarter — the first negative free cash flow reading since 2012.
Steve Sosnick, chief market strategist at Interactive Brokers, said investors fear the new share class could lead to longer-term dilution, which helped fuel the selling pressure.
Wider tech-sector impact
Concerns around Meta rippled through the broader technology sector. Cloud provider CoreWeave — whose market value had already shrunk by more than 34% in October — fell another 8.4% on Thursday. Competitors and related data-center operators, including Nebius Group, IREN and Applied Digital, also posted significant losses.
The sell-off hit the semiconductor space as well: the Philadelphia Semiconductor Index lost over $688 billion in market value in a single day, underscoring how worries about debt-financed AI and data-center spending can trigger wide industry declines.
CDS moves at other large firms
It was not only Meta seeing elevated CDS levels. Oracle’s five-year CDS spread was near historical highs, and Amazon’s five-year CDS rose to levels not seen since March 2020. These moves reflect heightened market sensitivity to the financing and credit risks associated with large-scale AI and data-infrastructure investments.
Why this matters
Meta’s combination of a higher capex outlook, a quarterly negative free cash flow print and the introduction of a non-voting share class has shaken investor confidence. The result was a sharp increase in perceived credit risk and selling across tech names, which could result in sustained volatility as markets reassess the financing risks of aggressive AI-related spending.
This article is not investment advice. An AI assistant contributed to preparing this piece; our journalist edited and verified the final content.
