Big Tech Stock Buybacks Fall 83% as AI Spending Eats the Cash

Big Tech stock buybacks have almost disappeared. Microsoft, Alphabet, Amazon, Meta and Oracle repurchased $13.6 billion of their own shares in the first nine months of 2026, down 83% from $81.8 billion a year earlier, according to a Reuters analysis of LSEG data published on October 30. The reason is the AI build-out: the five companies' capital spending doubled to $556.9 billion over the same period and, for the first time in data going back to 2011, exceeded all the cash their businesses generated.

For two decades, buybacks were one of the main ways the largest tech companies rewarded shareholders and lifted earnings per share. The new numbers show how completely the AI race has changed that bargain, and they arrived in the same week that Alphabet and Amazon earnings sent the Nasdaq to its worst day since June.

-83%

Buybacks, first nine months of 2026

$556.9B

Capex at the five companies, up 2x

$542.9B

Operating cash flow, a record but smaller

9.3%

Share of cash returned, from 27.4%

Capex now exceeds the cash coming in

The core of the Reuters analysis is a simple comparison. Operating cash flow at the five companies rose 29% to a record $542.9 billion in the first nine months of the year. Capital spending, mostly data centers, chips and power, rose faster, to $556.9 billion. That left a combined free cash flow deficit of $14 billion, against a surplus of $143.5 billion a year earlier.

Shareholders still received some cash. Dividends rose to $37 billion from $33.9 billion. But dividends and buybacks together came to $50.6 billion, or 9.3% of the cash the companies generated, the lowest share in at least 15 years and down from 27.4% a year earlier. Because free cash flow was negative, Reuters noted, those payouts were effectively funded from cash reserves, borrowing or share sales.

Alphabet and Meta stopped buying back stock

The biggest change came at the two companies that had been the most generous. Alphabet and Meta have not repurchased a single share in 2026, after buying back a combined $66.5 billion in the first nine months of 2025. Alphabet has gone further and started raising money. In the third quarter alone it took in about $12.4 billion from selling shares through an at-the-market program and $29 billion from debt, its earnings release shows, while free cash flow was negative $9.1 billion.

That matters for earnings per share. Alphabet cut its share count by 9.5% between the end of 2020 and 2025, ING estimates, which added roughly 2% a year to EPS growth. Without that tailwind, profit growth has to come from the business alone, at the moment investors are questioning how fast AI revenue will arrive. Alphabet fell more than 12% on October 29 after its results and ended October with its worst month on record, CNN reported.

Microsoft is the last big buyer

Microsoft accounted for nearly all of the buybacks that remain, and even it is buying less: $4.4 billion in the September quarter, down from $5.7 billion a year earlier. It is also the one company in the group still producing positive free cash flow, $18.6 billion last quarter according to CNN. Amazon pays no dividend and has not bought back shares since 2022. Its third-quarter capex of $75.9 billion was almost 80% more than the cash its operations generated, and it raised $48.1 billion of long-term debt in the quarter, Reuters reported.

From returning capital to asking for it

The shift reverses a long trend. Technology and communication services stocks make up about 43.5% of US market value, but their shareholder yield was 0.28% in July, against 1.99% for the rest of the market, according to MSCI data cited by Reuters.

Not every analyst sees that as a problem yet. Mark Schilsky, a technology sector specialist at JPMorgan, wrote in a client note cited by Reuters that investors care much more about EPS than free cash flow. The test is whether the spending lifts earnings before the missing buybacks and the new debt start to weigh on them. We looked at the same cash squeeze company by company in our analysis of AI capex and cash flow, and at what it did to one credit rating in our report on S&P's negative outlook for Meta.

What the AI Bubble Index says

The AI Bubble Index read 62.9 after Friday's close, in the Normal band, down from 64.1 a week earlier. The sentiment and attention family stands out at 91.8, the highest of the five, which fits a week when AI bubble headlines dominated market coverage. The demand family is the lowest at 39.1. Fragility, at 68, sits slightly above Euphoria, at 66.3. A one-week move of about one point is small, and the dashboard shows each family day by day.

Disappearing buybacks are one of the cash-flow risks we track in our guide to AI investment risks. The methodology explains how the index separates euphoria in prices from fragility in the financial system.