Microsoft among hyperscalers driving S&P 500 capex to $1.5T, curbing buybacks
MSFT•Microsoft and four other hyperscalers have driven a $500 billion increase in S&P 500 capital expenditure to $1.5 trillion over two years. They have sharply reduced share buybacks while overall S&P 500 net repurchases still reached a record $270 billion in Q1.
1. S&P 500 Capex Surge
Capital expenditure across the S&P 500 climbed from $1 trillion to $1.5 trillion over two years, with roughly two-thirds of that increase sourced from five hyperscalers including Microsoft.
2. Microsoft's Buyback Reduction
Microsoft has sharply reduced share repurchases to redirect cash into building AI infrastructure, data centers and other growth projects, while also raising new capital.
3. Record Index-Wide Repurchases
Excluding the hyperscalers, the remaining S&P 500 constituents increased quarterly net buybacks by nearly 30% year-over-year, driving total net repurchases to a record $270 billion in the first quarter.
4. Broader Market Implications
The surge in AI capex is boosting earnings growth and repurchases at semiconductor manufacturers, technology hardware firms, engineering companies and data center REITs, offsetting reduced buybacks by top tech firms.
