Alphabet’s capital allocation has changed dramatically in less than two years.
Quarterly stock repurchases remained around $14–15B through early 2025, while capital expenditure was still below $17B. By Q2 2026, buybacks had fallen to zero for a second consecutive quarter, while CapEx climbed to nearly $45B.
The shift shows how aggressively Alphabet Inc. is prioritising the infrastructure required to compete in AI:
- More servers and advanced chips
- Larger data centre capacity
- Expanded networking and supporting infrastructure
- Greater capacity for Google Cloud and AI products
This does not necessarily mean buybacks have disappeared permanently. But for now, cash that might previously have reduced the share count is being redirected toward future computing capacity.
Alphabet has the balance sheet to spend heavily. Investors will likely focus on the returns generated by that spending.
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