Big Tech’s Soaring Spending on AI Is Eating Into Stock Buybacks
The pile of money being thrown at AI-related infrastructure has investors looking more closely at the companies’ free cash flow, a metric that demonstrates how profits are being converted into capital.
Photographer: Liesa Johannssen/BloombergAfter years of funneling cash to investors through stock buybacks, big technology companies are reining in that spending as they race to sink more money into artificial intelligence.
Last quarter, Alphabet Inc., Microsoft Corp., Amazon.com Inc. and Meta Platforms Inc. spent the least on combined share repurchases than in any quarter since 2019, according to data compiled by Bloomberg. Alphabet and Microsoft spent roughly $11 billion on buybacks, while Amazon and Meta held off entirely. Amazon hasn’t bought back stock since 2022.