Meta stock sinks 6% as AI spend pushes free cash flow negative

Meta shares fell 6% as heavy AI investment pushed free cash flow into negative territory, a sign that investors are becoming less willing to treat infrastructure spending as an open-ended bet. The price of Meta's five-year credit default swaps also reached an all-time high, indicating rising concern about the company's credit risk. For AI builders, the spending still points to continued demand for compute, data centers, chips, and model infrastructure. But the market reaction shows that even highly profitable platforms face pressure to connect AI capital expenditure with measurable revenue or efficiency gains. Meta now has to demonstrate that its infrastructure buildout can support products and returns quickly enough to offset the cash drain.