Goldman Sachs finds $755 billion in 2026 capex for top AI firms will absorb all operating cash flow, limiting shareholder returns.
The five largest AI hyperscalers—Amazon, Alphabet, Meta, Microsoft, and Oracle—are projected to spend $755 billion on capital expenditures in 2026, an 83% annual increase. This surge in AI infrastructure investment is consuming nearly all operating cash flow, leaving little room for share repurchases that have historically supported stock prices.
Historically, technology giants relied on buybacks to return cash to shareholders, even during market volatility. However, the scale of current AI spending, expected to reach 100% of cash flow from operations this year, marks a structural shift in capital allocation priorities.
The shift may pressure companies to increase debt or reduce investment plans to maintain shareholder returns, potentially impacting equity valuations across the sector.