Big Tech buybacks shrink as AI data center spending eats cash

How far have Big Tech buybacks fallen?

Combined buybacks at Alphabet (Nasdaq: GOOGL), Amazon, Microsoft, Meta and Oracle fell to $4.4 billion in the quarter ended in September, The Kobeissi Letter said in a post on X. That was the lowest since 2017.

Why it matters: A buyback is a company purchasing its own shares on the open market. It shrinks the share count and gives the stock a reliable buyer.

Microsoft did all of that buying, the post's figures show, and it bought back less than a year earlier. Alphabet and Meta have repurchased no stock this year. Amazon has not bought back shares since 2022.

Where is the cash going instead?

"AI spending is coming at the expense of Big Tech buybacks," The Kobeissi Letter said. The money is going into data centers and the chips and equipment inside them.

Alphabet and Amazon reported far higher capital spending, the money a company puts into buildings and equipment, than a year earlier. Amazon expects heavier cash spending in 2026, and Meta narrowed its 2026 spending outlook.

To cover the gap, the companies are borrowing and selling stock. Oracle said it would raise money through both debt and new shares.

How did the stocks trade?

Scrutiny of AI spending weighed on tech in October. The Nasdaq-100, an index of the biggest Nasdaq-listed companies and mostly tech, fell 6.7% that month.

On Wednesday the shares moved the other way. Amazon rose 6.1%, Alphabet's Class C stock climbed 3.2% to $287.30 and Meta gained 1.4%. No reason for the gains was given.

Even after that rise, Alphabet's Class C stock sits 28.0% below its 52-week high, the top price of the past year.

What could change next?

The open question is whether the data center spending earns enough to restart buybacks, or whether borrowing keeps growing. Each company's next quarterly report could show which way that is going.

Borrowing costs matter here too. The October consumer price index, the government's monthly inflation report, is due Nov. 10 at 8:30 a.m. ET. It may shape expectations for the Federal Reserve's next rate decision and the cost of new debt.