Companies with aggressive buybacks have lagged the S&P 500 in the AI era

Barclays argues that a slowdown in buybacks by major U.S. tech companies should not materially hurt the broader equity market because investors are prioritizing AI-driven growth over capital returns. The note says hyperscaler capex could surpass $1 trillion annually by 2028, forcing Big Tech to redirect cash toward AI infrastructure. Buybacks by the largest technology firms have already dropped about 17% over the past year, while repurchases across the rest of the S&P 500 have continued rising. Barclays highlighted that Apple, Microsoft, Nvidia, Alphabet, Amazon and Meta represented more than a quarter of S&P 500 buybacks in 2024 and 2025. Since ChatGPT launched in late 2022, the S&P 500 Buyback Index has lagged the broader S&P 500 by roughly 30%, reinforcing the view that markets are rewarding reinvestment in AI rather than shareholder payouts.