Capex boom unlikely to crowd out buybacks, Deutsche Bank says

Industry
โดย Investing.com·Read original
Summary · why it matters

A surge in artificial intelligence-related capital spending is unlikely to undermine share buybacks across the broader U.S. equity market, according to Deutsche Bank. Capital expenditure across the S&P 500 has climbed from an annualized pace of roughly $1 trillion to about $1.5 trillion over the past two years, with around two-thirds of that increase coming from five hyperscalers: Amazon, Microsoft, Alphabet, Meta Platforms and Oracle. Those companies have sharply reduced share buybacks as they channel more cash into AI infrastructure, but the spending is driving strong earnings growth among AI infrastructure suppliers, which have begun increasing their own repurchases. Overall, S&P 500 net buybacks reached a record $270 billion during the first quarter, with gross buybacks climbing to about $300 billion, and current levels remain broadly in line with historical relationships to earnings and market capitalization. Rising inflows into U.S. equities, elevated household cash balances, and continued earnings growth are expected to provide support despite a recent jump in IPOs and secondary offerings.

Impact on stocks 5

Artificial Intelligence▼ · 4 stocks
Amazon.com Inc
AMZN
▼ NegativeCapitalrelevance

Amazon is one of the hyperscalers that have sharply reduced share buybacks to fund AI capex.

Alphabet Inc Class C
GOOG
▼ NegativeCapitalrelevance

Alphabet is one of the hyperscalers that have sharply reduced share buybacks to fund AI capex.

Meta Platforms Inc.
META
▼ NegativeCapitalrelevance

Meta is one of the hyperscalers that have sharply reduced share buybacks to fund AI capex.

Microsoft Corporation
MSFT
▼ NegativeCapitalrelevance

Microsoft is one of the hyperscalers that have sharply reduced share buybacks to fund AI capex.

Cloud & Digital Infrastructure▼ · 1 stocks
Oracle Corporation
ORCL
▼ NegativeCapitalrelevance

Oracle is one of the hyperscalers that have sharply reduced share buybacks to fund AI capex.

Theme Impact 2

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