Wall Street’s AI Investment Surge
Google parent Alphabet is allocating between $180 billion and $190 billion for AI-driven capital expenditures in 2026, while Meta Platforms projects an increase in AI spending to between $125 billion and $145 billion. Early results have shown significant gains, with Google Cloud reporting a 63% rise in high-margin sales following the integration of generative AI.
Despite the promising outcomes, both companies have ceased share buybacks after spending $15.1 billion and $12.8 billion, respectively, in the first quarter of 2025. This trend may impact the overall stock market, which had seen substantial buybacks driven by corporate tax cuts—resulting in an anticipated $1.2 trillion in buybacks by S&P 500 companies in 2025.
Over the past decade, Alphabet has repurchased around 13% of its shares, and Meta has done similarly. However, the shift towards AI investment may signal a decline in such buyback activities across Wall Street’s major players.
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