AI Swallows Buyback Funds, Tech Giants Lose a Layer of Stock Price Support

TechFlow reports, July 28, according to Jin10 Data, Alphabet, Amazon, Meta, Microsoft, and Oracle repurchased a total of approximately $9 billion in the first quarter, falling to a low not seen in nearly a decade, a decrease of over 80% compared to the peak of approximately $50 billion in 2021. Among them, Meta's first-quarter repurchases fell to zero, while repurchasing $12.75 billion in the same period last year; Bloomberg statistics show that among the four major AI spenders—Alphabet, Amazon, Meta, and Microsoft—only Microsoft continues to conduct repurchases.

This reflects that tech giants' capital allocation is shifting from shareholder returns to data centers, chips, and network equipment. The annual capital expenditure expectations for the five companies have been raised from approximately $485 billion at the beginning of the year to approximately $730 billion, compressing short-term free cash flow and repurchase space simultaneously. Reduced repurchases will not directly determine a stock price decline, but it means the stabilizing forces of reducing floating shares, offsetting equity incentive dilution, and absorbing selling pressure are weakening; tech stock valuations will rely more on whether AI revenue and cash flow can be realized in a timely manner.