Meta lifts 2026 capex to as much as $145B as credit default swap costs hit record

On Wednesday, October 21, 2026, Meta said in its quarterly earnings report that it expects 2026 capital expenditures of $135 billion to $145 billion, raising the low end of the range by $5 billion from $130 billion. The same report showed third-quarter free cash flow of negative $2.12 billion, the first negative reading since the company went public in 2012. Meta also announced plans to issue a new class of non-voting stock through a stock dividend, with holders receiving one new share for each share they own, effectively a two-for-one split; the new shares are expected to begin trading in January.

Following the disclosure, Meta's five-year credit default swap (CDS) spread widened by 7.6 basis points on Thursday to 114.79 basis points, a record high. According to Markit data, that level represents the highest cost the market has demanded to take on or insure against Meta's credit risk. Meta shares fell nearly 7% the same day to $648.85. Wallstreetcn reported that Meta's market value dropped by more than $100 billion, and that its total AI funding commitment had surged to $825 billion; overnight, the Nasdaq fell 2.6% and the Philadelphia Semiconductor Index dropped 6.7%.

Amid the selloff, both UBS and Deutsche Bank maintained buy ratings and raised their price targets in research notes. UBS analyst Stephen Ju lifted his target from $884 to $892, while Deutsche Bank analyst Benjamin Black raised his from $820 to $840. Both firms argued that Meta's AI capital spending over the past three years is beginning to pay off, with the advertising system as the first beneficiary, five AI commercialization paths already underway, and compute shifting from a cost burden to a revenue-generating asset. The situation currently rests here: Meta's capex increase and first negative free cash flow have fueled market concerns, with both its CDS spread and share price weakening, while some Wall Street firms remain bullish.