Investors often concentrate on whether Alphabet can continue to expand Google Cloud, YouTube, and Search. But another number that has quietly helped shareholders for years is disappearing, and is equally important.
Historically, Alphabet’s (GOOGL) outstanding shares have declined due to its share repurchases totaling tens of billions of dollars. As a result, there were fewer shares, which helped per-share profits increase more quickly than overall profits.
The advantages extended far beyond direct Google stock purchasers. Millions of investors in retirement accounts and exchange-traded funds hold Alphabet shares because it is a significant part of broad market and technology indices.
Now that tailwind has ceased.
According to its most recent statement with the Securities and Exchange Commission, Alphabet did not buy back any Class A or Class C shares in the first nine months of 2026. For comparison, it spent around $62 billion on buybacks in 2024 alone.
The reason seems clear. Alphabet is spending enormous sums on artificial intelligence infrastructure, leaving less money available for shareholder-friendly buybacks.
That alters the deal for regular investors.
Money Alphabet formerly used for buybacks to increase per-share profits now goes toward electricity, data centers, and semiconductors as Google invests heavily in AI Mode and Gemini.
For the math to make sense to investors, these AI investments must progressively generate enough additional revenue to offset the benefit shareholders currently enjoy from repurchases.
Alphabet’s buyback machine has gone quiet
Alphabet is still authorized to buy back shares, given its board approved a $70 billion repurchase program in April 2025, with $69.5 billion remaining available as of Sept. 30.
Yet Alphabet did not repurchase any shares in the first nine months of 2026, despite raising fresh capital.
During the third quarter, Alphabet sold 36 million Class A and Class C shares through an at-the-market program, raising about $12.4 billion. It also issued $28.7 billion of senior unsecured notes.
Investors had been used to a model that is almost the opposite of that.
It spent about $62 billion on buybacks in 2023 and 2024.
As a result, Alphabet reduced its share count by 9.5% between the end of 2020 and 2025, according to Reuters, citing ING. Even without further profit growth, buybacks alone increased earnings per share by almost 2% annually.
This is important because Wall Street often uses per-share profits to determine a company’s worth.
“Investors care so much more about EPS than FCF,” JPMorgan technology specialist Mark Schilsky said.
The mechanics are straightforward for a single stakeholder.
Earnings per share increase when a business makes the same amount of money but distributes it across fewer shares.
Instead, if the number of shares starts to rise, each current investor will hold a smaller piece of the business unless earnings increase quickly enough to offset the dilution.
AI spending is changing Big Tech shareholder returns
Alphabet is not by itself.
Microsoft, Alphabet, Amazon, Meta and Oracle generated a combined $542.9 billion in operating cash flow during the first nine months of 2026, according to Reuters.
They spent a total of $556.9 billion on capital projects.
The five companies cut buybacks by 83% to $13.6 billion from $81.8 billion last year. Microsoft repurchased most of the remaining amount, while Alphabet and Meta did not.
More Google:
- Google is making a change in November that might catch Gemini users off guard
- Google set to challenge Meta Muse in the Agentic AI race
- Google just disclosed something troubling about its AI
For retirement savers, this matters even if they don’t own the individual stocks directly.
Many market indexes include Alphabet, Microsoft, Amazon, and Meta. Changes in how these companies generate per-share returns affect many index funds, ETFs, and retirement portfolios.
Returns on buybacks were never certain.
However, they gave prosperous businesses a very simple means to raise the profits claim of each surviving stakeholder.
Spending on AI substitutes a much less assured premise for that predictable process.
In the hope that AI infrastructure will provide far greater revenues in the future, investors are forgoing some financial returns today.
Alphabet investors now need AI to deliver
There is already evidence that Alphabet’s spending can produce returns.
In the September quarter, Google Cloud’s operational income increased from $3.6 billion to $11.1 billion.
Investors need to see just that kind of development.
The question is whether it can go fast enough to counteract depreciation, increased capital expenditures, and maybe an increase in the number of shares.
Free cash flow, share repurchases, and AI-related profit growth are three metrics that now need special consideration.
Investors may be able to reclaim the previous shareholder-return engine while reaping the benefits of the new one if Alphabet’s free cash flow improves and management resumes significant buybacks while AI revenue continues to grow.
AI will face a far greater obstacle if capital investment continues to outpace cash generation and the share count begins to rise.
For the typical investor, it is the main outcome.
In the past, Alphabet had enough cash on hand to make significant investments in its companies while also reducing the number of shares it held.
The AI race is now receiving a larger portion of that money.
The issue of whether Google’s AI technologies are effective is no longer the only one for shareholders.
The question is whether they earn enough to offset the temporary financial boost investors forfeited to pay for them.
Related: Apple and Alphabet are sending Wall Street different signals
