Neither Alphabet nor Meta repurchased shares during 2026. The buybacks and dividend payments that major technology firms continue to make are now financed through existing cash reserves, new debt issuance or equity sales rather than operating profits.
Over the first three quarters of 2026, Microsoft, Alphabet, Amazon, Meta and Oracle returned just 9.3% of their operating cash flow to shareholders. This represents the lowest proportion in at least 15 years, a dramatic decline from 27.4% in the same period a year prior.
According to analysis by Patturaja Murugaboopathy of Reuters using LSEG data and corporate filings, these five companies generated operating cash flow of $542.9bn, up 29% year-over-year. However, their capital expenditures doubled to $556.9bn, surpassing their operating cash generation for the first time since 2011.
Buybacks bear the brunt
The imbalance between spending and cash generation produced a combined free cash flow deficit of $14bn, compared with a $143.5bn surplus twelve months earlier. Share repurchase programs absorbed most of this deterioration, plummeting 83% to $13.6bn from $81.8bn. Dividend payments, by contrast, increased to $37bn from $33.9bn.
Alphabet and Meta suspended buybacks entirely in 2026 after repurchasing $66.5bn of stock in the first nine months of 2025. Amazon has not repurchased shares since 2022 and does not pay dividends. Microsoft conducted nearly all remaining buybacks, reducing them to $4.4bn in the third quarter from $5.7bn previously.
With free cash flow negative, the $50.6bn distributed to shareholders came from cash reserves, new borrowing or equity issuance, Reuters determined. Amazon issued $48.1bn in long-term debt during the third quarter alone. Alphabet raised approximately $12.4bn through share sales and $29bn through debt offerings.
Why buybacks matter to investors
Share repurchases mechanically increase earnings per share by spreading profits across a smaller number of outstanding shares, even when underlying profits remain flat. Between the end of 2020 and 2025, Alphabet reduced its share count by 9.5%, according to ING, which contributed approximately 2% annually to its earnings per share growth.
For the last 15 years, companies increasingly returned excess capital to shareholders through buybacks and dividends
Ehren Stanhope, co-head of investment management at Franklin Templeton
The current regime may increasingly be characterized by greater equity and debt issuance, a request of capital from investors
Ehren Stanhope, co-head of investment management at Franklin Templeton
Technology executives maintain that their infrastructure outlays will generate substantial returns. Amazon Chief Executive Andy Jassy stated to analysts that the company sees a transparent path to attractive returns and plans to increase spending in 2027. Oracle has committed to reaching $30bn in free cash flow by 2029. The five firms collectively maintain over $3tn in commitments for AI infrastructure development, and Amazon has secured borrowing capacity of up to $80bn against its AI hardware purchases.
Source: The Next Web
