Big Tech's $500 billion spending spree leaves a lot less for shareholders

By Jurica Dujmovic

AI is changing the bargain between large technology companies and their shareholders

Alphabet now spends more than its operations bring in.

In the first nine months of last year, Alphabet and Meta Platforms spent a combined $66.1 billion buying back their own stock. Over the same nine months this year, they spent nothing on that.

Both companies kept paying dividends. But buybacks, the bigger and more flexible way they return cash to shareholders, have stopped. Alphabet went further: In June it announced $80 billion of stock sales, describing that as part of its plan to fund artificial-intelligence infrastructure, with Berkshire Hathaway (BRK.A) (BRK.B) agreeing to buy $10 billion. A company that spent $39.8 billion repurchasing its own shares in the first nine months of 2025 is now issuing new ones.

At the same time, their cash is pouring into data centers, chips and the rest of the physical machinery behind AI. Shareholders are being asked to take less cash back today in exchange for profits that depend on that spending paying off.

To see why that trade matters, let's start with what a buyback does. A share of stock is a claim on a slice of a company's profits. When a company buys back its own shares and retires them, the same profits are divided among fewer shares, so each remaining slice gets bigger.

Take a company that earns $100 and has 100 shares outstanding. Each share earns $1. If the company buys back five shares and profits stay flat, each of the remaining 95 earns about $1.05. The business is no bigger, yet every remaining shareholder owns slightly more of it. When buybacks stop, so does that boost. When a company issues new shares, the scenario runs in reverse.

My calculations based on company financial statements show how fast the money has been redirected. In the first nine months of 2026, Microsoft (MSFT), Alphabet (GOOG) (GOOGL), Amazon.com (AMZN) and Meta (META) spent a combined $496.7 billion in cash on property and equipment - the buildings, servers and chips their businesses run on. Their operations brought in $498 billion in cash over the same stretch. Almost every dollar their businesses produced went straight back into building more capacity.

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A year earlier, the same four spent $257.4 billion on property and equipment against $401.7 billion of operating cash. Their spending has since risen about 93%, while the cash their businesses generate has grown 24%.

Alphabet now spends more than its operations bring in: $132 billion on property and equipment over the nine months, against $127.1 billion of operating cash. It also borrowed, raising $28.7 billion from a note sale in the third quarter. Part of the June plan was a $40 billion program for selling shares gradually into the market, which Alphabet says is mainly meant to cover taxes on employee stock awards. That program raised $12.4 billion in the third quarter. Meta spent $83.1 billion on equipment against $96.9 billion of operating cash, and it plans to create a new class of nonvoting shares in January 2027 to help fund investment, acquisitions and employee pay.

Microsoft is in a more comfortable position. Its operations still bring in considerably more cash than it spends on equipment, and it is still buying back stock, just less of it. Its annual report and latest quarterly filing show $9.7 billion of purchases under its buyback programs from January through September, down from $10.7 billion a year earlier. In the September quarter alone, those purchases fell 26% to $2.9 billion.

Amazon sits at the other extreme. Its equipment purchases exceeded its operating cash, but it bought back no stock in either year, so it added nothing to the decline.

The spending totals I calculated cover each company's whole business, not only AI, and leave out equipment acquired through finance leases, which are long-term rentals that work much like purchases, along with repayments on those leases. Amazon's figure is before deducting proceeds from asset sales and incentives. Microsoft's fiscal year ends in June, so I aligned its reporting periods with January through September.

None of this means the money is being wasted. The companies' cloud businesses, which rent computing power and storage to other companies, are growing faster than they have in years. Amazon Web Services revenue rose 39% in the September quarter, its fastest pace in nearly five years. Microsoft reported 48% growth at Azure. "Our AWS investment in functionality and infrastructure is working," Amazon CEO Andy Jassy said in the company's results release.

Fast revenue growth still doesn't settle whether the spending will earn an adequate return. The new data centers cost money to run, the chips inside them wear out, and some of the expansion is now financed with debt. Accounting can also flatter the picture. A company pays for equipment up front but charges the cost against profits gradually, as depreciation, so profits can look strong while cash pours out the door. As more of the new equipment goes into service, those charges will start to weigh on earnings.

Apple (AAPL) shows what the other path looks like. Its latest results show $61.7 billion of buybacks in the three quarters ending in September, more than six times what Microsoft, Alphabet, Amazon and Meta repurchased combined. Over the same period, Apple spent $6.7 billion on property and equipment. Both buyback figures exclude shares withheld to cover employee taxes, and Apple's fiscal quarters end a few days off the calendar ones.

Even Apple's buybacks are down 8.1% from $67.1 billion a year earlier, though the latest quarter moved the other way. Subtracting Apple's nine-month figures through June from its annual totals shows September-quarter repurchases rose 20.7% to $24.3 billion.

That doesn't prove Apple's lower capital spending is the right call. It does mean these stocks are no longer the same bet. Apple still spends nine times as much buying back stock as on new equipment. The others are asking shareholders to fund the buildout.

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For investors, two numbers will show whether that bet is paying off. The first is whether cash from operations starts growing faster than capital spending. The second is the share count. Stock handed to employees as pay can offset the shares a company retires, so I would track shares outstanding to see whether each shareholder's stake is actually growing. At Alphabet, the new stock sales push it the other way.

Big Tech's managers have chosen to put more of their shareholders' money to work. Now they have to prove it earns more there than it would have back in shareholders' pockets.

-Jurica Dujmovic

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11-04-26 0939ET