Goldman warns Big Tech's AI bill is squeezing S&P 500 buybacks
Goldman Sachs expects S&P 500 share buybacks to grow only 3% this year, citing the cost burden of AI infrastructure and a softer macro backdrop. Big Tech's capex commitments are forcing companies to rethink shareholder payouts, the bank said.
Goldman Sachs now expects S&P 500 share buybacks to grow just 3% this year, MarketWatch reported. The bank pointed to the record capital expenditure flowing into artificial intelligence infrastructure and a softer macroeconomic backdrop as the main drags on payout growth.
Microsoft, Alphabet, Meta and Amazon are collectively projected to spend hundreds of billions of dollars in 2026 on AI data centres and chip procurement. That outlay is absorbing free cash flow that traditionally returned to investors through buybacks and dividends.
Goldman said the slowdown is not confined to Big Tech: tariff uncertainty and the energy shock from the Iran war are also pushing other sectors to conserve cash. The bank said a meaningful recovery in buyback activity in 2027 will depend on whether the pace of AI capex eases by then.
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