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US TECH COMPANIES DRIVE RECORD SHARE BUYBACKS

U.S. technology companies are accelerating share buybacks at a surprising pace despite mounting concerns over artificial intelligence capital expenditure, helping push global buyback announcements to a record $533 billion in April and May combined, according to research from JPMorgan.

Analysts led by Nikolaos Panigirtzoglou note that the surge in U.S. tech buybacks — both relative to the same period in 2025 and the second half of last year — appears counterintuitive.

With AI spending demands weighing on balance sheets, many expected tech firms to conserve cash rather than return it to shareholders. JPMorgan argues the opposite has happened because cash flow growth is tracking at 25% this year versus capex growth of 20%, widening the sector's financing surplus and giving companies room to buy back stock aggressively.

The April-May total surpasses the previous two-month record of $487 billion set in the same period a year ago, and implies an annualized buyback rate of close to $1.9 trillion for 2026 as a whole.

Despite a growing equity supply pipeline — including Alphabet's plan to raise $80 billion through equity offerings and several major IPOs in the works — JP Morgan said net equity supply is unlikely to change materially this year or next. The bank projects net equity issuance of around $200 billion for 2026, compared with roughly zero last year.

A projected $1.3 trillion rise in share counts in 2027 largely reflects mechanical index reclassifications following IPO lock-up expirations, the strategists added, rather than true equity supply.

(Karen Brettell)

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