Five Tech Companies Cut Share Buybacks 83% to $13.6 Billion

Key Facts

Microsoft, Alphabet, Amazon, Meta and Oracle cut share buybacks 83% to $13.6 billion in the first nine months of 2026, from $81.8 billion in the same period of 2025, according to a Reuters report published by WHBL on October 30. The companies returned the equivalent of 9.3% of the cash they generated to shareholders through dividends and buybacks, down from 27.4% a year earlier. This came as the companies directed more resources toward capital spending driven by the AI boom. Combined operating cash flow reached a record $542.9 billion, up 29% year over year. But the increase in operating cash did not prevent capital spending from exceeding that amount, a shift that puts greater pressure on investment funding and shareholder payouts.

Capital spending by the five companies doubled to $556.9 billion in the first nine months of 2026. This was the first time it exceeded operating cash flow in the series dating back to 2011, according to the report. The gap resulted in a combined free cash flow deficit of $14 billion, after the companies recorded a surplus of $143.5 billion in the same period a year earlier. The shift means cash generated from operations was no longer sufficient to cover combined capital spending during the period. Even so, the companies paid shareholders $50.6 billion through dividends and buybacks. The report described these payments as effectively funded by cash reserves, borrowing or share sales.

Alphabet and Meta did not buy back shares in 2026 through the date of the report, after repurchasing $66.5 billion worth of shares in the first nine months of 2025. By contrast, combined dividends at the five companies rose to $37 billion from $33.9 billion a year earlier, showing that the decline was concentrated in buybacks while dividends increased. Microsoft cut share buybacks to $4.4 billion in the September 2026 quarter, from $5.7 billion in the same quarter a year earlier. Buybacks played a role in reducing Alphabet's shares outstanding; the company cut its share count 9.5% between the end of 2020 and 2025. ING estimated that this decline added about 2% a year to earnings per share without earnings growth, according to the report.

Amazon's third-quarter figures show the scale of the gap between investment and cash generated from operations at an individual company: capital spending was $75.9 billion, compared with $42.4 billion generated by its operations. The company raised $48.1 billion in long-term debt during the quarter. Alphabet, meanwhile, had negative free cash flow and raised about $12.4 billion from share sales and $29 billion in debt through the date of the report. These figures show additional funding sources the two companies turned to as spending widened. Reuters reported that Amazon expects capital spending of about $220 billion in 2026, while the other companies signaled further increases in spending.

The shift in cash flows coincided with volatility in technology stocks. On October 30, Alphabet closed at $279.84 and Meta at $614.99, according to EL7 data. In the same session, the Nasdaq Composite fell 2.9%, and the Associated Press said the sell-off was linked to concerns that AI fever had driven stock prices too high, as well as worries raised by Amazon's earnings report about the scale of spending. Alphabet shares fell 12.6% in Thursday's session, October 29, then declined 1.4% the following Friday, according to Reuters via Investing.com, which linked the move to the company's cash flow turning negative because of AI spending. The Nasdaq 100 also fell more than 5.8% in October through the 30th, as investors stepped up scrutiny of how quickly spending would generate returns.

Looking ahead, Amazon expects capital spending of about $220 billion in 2026, and the other companies signaled further increases. More broadly, JPMorgan forecast global capital spending on AI would reach $900 billion in 2026 and $5.5 trillion by 2030, according to Reuters via Investing.com. Oracle presented a separate timeline for cash flows and financing at its investor day: it is targeting positive free cash flow in the second half of its fiscal 2028. It also said it would limit additional capital raises through fiscal 2030 to $20 billion, split equally between equity and gross debt. These forward targets put the funding and timing of capital expansion at the center of investors' focus.