Big Tech's Buyback Engine Just Stalled 🧐

The four largest AI spenders – Alphabet, Microsoft, Meta and Amazon – posted their lowest quarterly buyback figures in nearly a decade. Only Microsoft bought back shares in Q1 2026. And that was just $3.4 billion. That number is tiny compared to their historical averages.

Alphabet's case is the most extreme. Zero buybacks. Last year they did $15 billion in the same quarter. Over the last five years Alphabet spent roughly $280 billion on repurchases – more than 6 percent of its current market cap. And now nothing.

Where did the money go

AI infrastructure. All of it. The four giants are forecasting combined capital expenditures of up to $725 billion this year. That is up from a record $410 billion in 2025 – a 77 percent jump. Let me break it down.

Alphabet's capex guidance for 2026 is $175 billion to $190 billion. Microsoft is at roughly $190 billion. Amazon is around $200 billion. Meta raised its guidance to $125 billion to $145 billion.

These numbers are insane. Goldman Sachs estimates that capex at these hyperscalers will consume about 100 percent of their 2026 operating cash flow. Free cash flow is getting eaten alive. That forces them to raise equity and take on more debt.

Equity sales are back

Alphabet just did its first equity sale in 20 years – raising about $85 billion. Meta is reportedly considering a similar offering worth tens of billions. These companies are not generating enough cash internally to fund the AI buildout. So they are tapping public markets.

The buyback era is ending

Goldman says buybacks among the top five AI hyperscalers fell 64 percent year‑over‑year in Q1 2026. Those companies are now spending just 15 percent of their cash on buybacks versus an average of 27 percent from 2017 to 2022. S&P 500 buyback growth for 2026 is projected at only 3 percent. Capex growth is at 33 percent.

The exception that proves the rule

Apple is still buying back aggressively. But Apple is not spending heavily on AI infrastructure. They are doing their own thing. So the pattern is clear – if you are in the AI race you are not buying back stock.

What this means

Buybacks were a massive support for tech stocks. They reduced share counts. They lifted earnings per share. They gave the market a floor. That floor is gone for the big AI players. They are now capital‑intensive businesses. They are building data centers. They are buying chips. They are hiring AI researchers. All of that costs real money.

The risk profile has shifted. These companies are no longer asset‑light cash machines. They are infrastructure builders. And the market has not fully priced that in yet. If AI investments do not deliver the expected returns the stock market could see a brutal repricing.

The era of massive buybacks is not over for everyone. But for the biggest AI spenders it is definitely on pause. And that pause might last a lot longer than people expect.
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This content is for informational purposes only and does not constitute financial advice.