The shareholder-return ratio at five U.S. tech giants has fallen to a 15-year low amid AI spending, while their buybacks have been cut by 83%. According to Sina Finance, citing Reuters, Microsoft, Alphabet, Amazon, Meta and Oracle devoted 9.3% of cash generated by their businesses to dividends and buybacks in the first three quarters of this year, down from 27.4% a year earlier; operating cash flow rose 29% to a record $542.9 billion.
Their capital expenditures doubled to $556.9 billion, exceeding the cash flow the companies had generated since data became available in 2011. Their combined free cash flow swung to a $14 billion deficit from a $143.5 billion surplus a year earlier. Buybacks fell to $13.6 billion from $81.8 billion a year earlier.
Alphabet and Meta have made no buybacks so far in 2026, after repurchasing $66.5 billion of shares in the first nine months of last year. Amazon pays no dividend and has not repurchased shares since 2022. Microsoft accounted for nearly all of the five companies’ remaining buybacks, cutting repurchases in its September quarter to $4.4 billion from $5.7 billion a year earlier.
Amazon’s third-quarter capital expenditure was $75.9 billion, nearly 80% more than the $42.4 billion it generated from operations, and it raised $48.1 billion in long-term debt during the quarter. Alphabet also had negative free cash flow and raised about $12.4 billion through share sales and $29 billion through debt issuance.
Ellen Stanhope, co-head of investment management at Franklin Templeton, said companies had increasingly returned surplus capital to shareholders through buybacks and dividends over the past 15 years. She said the current trend may involve increasing equity and debt issuance as a way to seek funds from investors.
Catherine
