Big Tech's AI spending cuts stock buybacks, Goldman Sachs sees only 3% S&P 500 buyback growth in 2026

Big Tech companies like Amazon, Alphabet, Meta, Microsoft, and Oracle are increasing their AI-related capital expenditures by 83% to $755 billion in 2026. This surge in spending on data centers and AI infrastructure has led to a nearly two-thirds reduction in stock buybacks in the first quarter. Goldman Sachs expects overall S&P 500 share buybacks to grow only 3% this year due to economic uncertainty and rising AI costs. This shift means investors may see fewer dividends and buyback-driven returns as companies prioritize AI investments.