Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction) is asking its investors to accept a trade-off that would have been unthinkable a year ago: give up the buybacks, and trust the AI bet instead.
According to CNBC’s MacKenzie Sigalos, in a segment on how “Alphabet sacrifices buybacks to fund its AI buildout,” the Google parent repurchased nothing in the first quarter, the first time it has bought back zero stock in a decade. That halts a buyback spree that returned close to $300 billion over the past five years. “Alphabet repurchased close to $300 billion worth of stock over the past five years, more than any of the other major AI hyperscalers,” Sigalos noted. “But then in Q1 it bought back nothing for the first time in a decade.”
The company’s own filings back that up. Alphabet listed no share repurchases in Q1 2026, while capital expenditures climbed to $35.67 billion, up 107.44% YoY, as the company nearly doubled its AI infrastructure spending. For the full year, Alphabet has guided to capex in the range of $175-$185 billion, disclosed in the company’s Q4 2025 SEC filings.
The Bet: Build, Don’t Buy Back
The logic is a confidence statement about AI’s profitability. “Management is betting that the same cash can earn a greater return by building the infrastructure needed to run and sell AI at scale,” Sigalos explained. In other words, Alphabet believes a dollar spent on AI-serving infrastructure will beat the immediate earnings-per-share lift it would get from shrinking its share count.
Alphabet is also buying stakes. “They’ve also been putting it toward a very aggressive venture operation,” Sigalos said. “Close to $40 billion stake in Anthropic.” That is the eye-opener: the same cash that once flowed back to shareholders is now funding both Alphabet’s own data centers and a massive equity position in one of the leading rival AI labs. Alphabet is hedging its in-house Gemini development with a strategic position in a direct competitor, spreading its bets across the AI landscape.
The Proof Point Arrives at Earnings
All of this sets up a high-stakes test when Alphabet reports. The number to watch is Google Cloud. “The whisper number is around 70% growth year over year,” Sigalos said, “and Alphabet has got to show that giving up the immediate return from buybacks can produce faster cloud growth and stronger margins.” Cloud grew 63% in the first quarter, so a step up toward 70% would help validate the reallocation. Faster cloud growth and expanding margins are the receipts management needs to justify sending buyback cash into servers and startups.
Prediction markets already lean heavily toward a beat. Polymarket traders assign a 96.3% probability that Alphabet clears the earnings bar ahead of its upcoming earnings report, though shares have slipped -5.67% over the past month even as they sit up 83.14% over the last year.
The Bigger Question
Underneath the numbers sits a debate about what this spending really signals. As the CNBC host put it, “Buybacks are what companies do if they don’t feel they have productive use for the cash. It’s surplus cash.” By that logic, halting buybacks says Alphabet believes it now has a productive use for every dollar. The bull case is conviction: a company seeing returns so compelling it would rather build than hand cash back.
The bear case is less flattering. It reads the buyback halt as competitive conformity in an AI arms race where enormous spending has become table stakes. The distinction matters for shareholders, because one interpretation means the money compounds and the other means it evaporates.
There is a telling detail in the comparison set. Among Alphabet, Microsoft, and Amazon, only Microsoft repurchased stock in the recent period. That makes Alphabet’s pivot part of a broader pattern of hyperscalers prioritizing the buildout over shareholder returns.
For now, Alphabet has drawn a clear line: the future of the company runs through AI infrastructure and strategic stakes like Anthropic. Whether that was visionary capital allocation or expensive herd behavior will start to become clear when Cloud’s numbers land. Investors who spent five years enjoying $300 billion in repurchases are being asked to be patient.
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