S&P 500 Capex Hits $1.5T as Oracle Cuts Buybacks for AI Spending
ORCL•S&P 500 capital expenditure climbed from $1 trillion to $1.5 trillion over two years, with Oracle among five hyperscalers driving two-thirds of the increase while scaling back buybacks. Other S&P 500 firms raised net repurchases by nearly 30% year-over-year, pushing buybacks to a record $270 billion in Q1.
1. Surge in S&P 500 Capital Expenditure
S&P 500 companies lifted annualized capital expenditure from roughly $1 trillion to $1.5 trillion over the past two years, driven by investments in artificial intelligence infrastructure and data centers.
2. Hyperscalers Shift Cash to AI Infrastructure
Oracle joined Amazon, Microsoft, Alphabet and Meta in accounting for two-thirds of the capex surge, diverting cash from share repurchases into new AI-related projects and raising fresh capital.
3. Robust Buybacks Outside Hyperscalers
The remaining S&P 500 firms increased net repurchases by nearly 30% year-over-year, contributing to record net buybacks of $270 billion and gross buybacks of $300 billion in Q1.
4. Equity Issuance and Market Support
A wave of IPOs and secondary offerings has raised equity supply, but strong investor inflows, elevated household cash and ongoing earnings growth are expected to support demand for shares.
