Big Tech halts buybacks as AI capex balloons to $755B for 2026

Alphabet, Amazon, Microsoft and Meta spent the least on combined share repurchases in Q1 2026 than any quarter since 2019, with only Microsoft buying back shares at $3.4 billion—the lowest in nearly a decade, according to Bloomberg. Alphabet cut buybacks to zero for the first time in nearly 10 years after spending more than $15 billion a year ago. Amazon and Meta held off entirely on repurchases. The shift reflects a dramatic reallocation of cash toward AI infrastructure as megacap hyperscalers race to build data center capacity.

Goldman Sachs projects megacap U.S. hyperscalers will allocate $755 billion to capital expenditures in 2026—an 83% year-over-year jump. Microsoft raised its 2026 capex guidance to $190 billion (a potential 130% YoY increase), Amazon to $200 billion, Alphabet to $175–$185 billion, and Meta to $125–$145 billion. These four companies alone forecast capex consuming 94% of operating cash flow after dividends, forcing them to tap debt markets at unprecedented scale. Bank of America and Evercore now estimate aggregate hyperscaler capex could exceed $800–$900 billion in 2026 and reach $1 trillion in 2027.

The buyback pullback reverses a decadal norm where Big Tech returned cash to shareholders via repurchases. Alphabet alone plowed ~$280 billion into buybacks over five years. However, AI infrastructure now takes priority—every capex dollar flows to GPUs, data centers, and cloud infrastructure rather than stock purchases. Apple and Nvidia remain exceptions, continuing buybacks while avoiding massive capex burdens through partnerships (Apple with Google on AI features) and a position as a supplier (Nvidia).

For infrastructure suppliers—semiconductor makers, power equipment vendors, network gear manufacturers—this represents a multi-year revenue tailwind. For equity investors used to buyback-supported EPS growth, patience is being tested; Goldman Sachs projects S&P 500 buyback growth at just 3% in 2026. Return on these AI investments remains unproven at scale, but cloud divisions are showing early monetization signals.