Goldman Sachs says surging investment in AI among the S&P 500 companies are diverting funds from stock buybacks , halting their usual yearly growth. Companies spent $550 billion on buybacks in early 2025 but that flatlined in Q2 as AI-driven capex jumped 24%.

One unexpected side effect of the Magnificent 7’s race to build massive AI data centers—and source the power needed to run them—is that they are reducing share buybacks to fund them, according to Goldman Sachs.

Companies routinely buy back their own shares to incentivize investors for holding them, to reduce the number of shares available (thus boosting earnings per share), and to boost their own stock prices.

Normally, companies increase their buyback activity by about 20% each year, according to a note written by Goldman’s Ben S

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