S&P 500 CapEx to Increase by 33% in 2026, Stock Buybacks Hit by AI 'Blood Sucking'

Goldman Sachs' latest research report points out that the cash distribution logic of S&P 500 component companies is undergoing a structural reshaping. It is estimated that total corporate cash spending will reach $4.90 trillion in 2026, a year-on-year increase of 21%; it will further rise to $5.53 trillion by 2027. However, the fruits of growth are almost exclusively consumed by AI capital expenditures — by 2027, capital expenditures and R&D combined will consume 55% of corporate cash, while the share for repurchases and dividends will be compressed to 35%.

AI Arms Race: The Five Titans Bet Their Entire Cash Flow

Amazon, Google, Meta, Microsoft, and Oracle are the absolute protagonists in this wave of capital spending. Goldman Sachs estimates that the combined capital expenditures of these five companies will reach $755 billion in 2026, a staggering 83% increase year-on-year, which coincidently equates to 100% of their estimated operational cash flow for that year— all cash generated from daily operations will be unrestrainedly poured into AI infrastructure.

Costs are also continuing to inflate. Microsoft expects its capital expenditures in 2026 to be around $190 billion, with $25 billion attributed to the rise in prices of memory and other components; Meta has also raised its annual capital expenditure guidance by $10 billion, due to increased component pricing and the expansion of data centers.

Preliminary data from the first quarter of the financial year 2026 confirms this trend: the actual growth rate of overall capital expenditures in the S&P 500 is as high as 39%, while stock repurchases have only grown by 1%.

Repurchases: The Most Direct Sacrifice

The consequence of cash being drained by capital expenditures is immediate. The repurchase amount of stocks by the five giants in the first quarter of 2026 plummeted by 64% year-on-year. Historically, these five companies have allocated about 34% of their expenditures to repurchases and dividends; now this proportion has shrunk to 20%, with repurchases accounting for only 12%.

Goldman Sachs forecasts that the overall repurchase scale of the S&P 500 in 2026 will be around $1.09 trillion, with a