In the buybacks vs dividends balance for 2026, buybacks remain the larger channel, but their growth has stalled while dividends keep rising slowly. S&P 500 companies spent a record $1.020 trillion on buybacks and $664.9 billion on dividends in the 12 months to September 2025, so buybacks were about 61% of cash returned [1]. In the first quarter of 2026, S&P 500 buybacks grew just 1% from a year earlier while capital spending rose 38%, according to Goldman Sachs data reported by Fortune [5]. As of July 30, 2026, several of the largest buyers had cut or paused repurchases to fund AI investment, while dividends kept growing.
Buybacks vs dividends in 2026: the starting point
The latest full aggregate data from S&P Dow Jones Indices show how central buybacks had become before this year [1][2]:
| S&P 500 measure | Latest figure |
|---|---|
| Buybacks, 12 months to Sept 2025 | $1.020 trillion (record) |
| Dividends, 12 months to Sept 2025 | $664.9 billion (record) |
| Total cash returned, 12 months to Sept 2025 | $1.685 trillion |
| Dividend per index share, 2025 | $78.92, up 5.5% |
| Expected dividend growth, 2026 | mid-single digits |
Buybacks are also concentrated. The top 20 companies accounted for 49.5% of third-quarter 2025 buybacks, and just four companies, Apple, Nvidia, Alphabet and Meta Platforms, accounted for more than 22%, or $55.2 billion [1]. That concentration matters in 2026, because a change in plans at a handful of companies moves the total.
How the biggest buyers changed course in 2026
Company filings show a sharp split among the largest technology firms:
| Company | Buybacks in 2026 period | Prior-year period | Dividends in 2026 period |
|---|---|---|---|
| Apple (9 months to June 27) | $62.1 billion | $70.6 billion | $11.8 billion |
| Alphabet (6 months to June 30) | $0 | $28.3 billion | $5.2 billion |
| Meta Platforms (6 months to June 30) | $0 | n/a | n/a |
| Microsoft (3 months to March 31) | $4.6 billion | n/a | n/a |
Sources: Apple [3], Alphabet [4], and DataPorium cash-flow data for Meta and Microsoft [6].
Alphabet and Meta: from buyers to issuers
Alphabet (GOOGL) made no share repurchases in the first half of 2026, compared with $28.3 billion a year earlier, while its dividend payments rose to $5.23 billion from $4.98 billion [4]. It went further in June 2026 and raised $49.6 billion by issuing Class A and Class C stock and mandatory convertible preferred stock, to fund AI infrastructure [4]. Its capital spending in the first half was $80.6 billion [4]. Meta Platforms (META) also reported no repurchases in either quarter of 2026, while capital spending rose from $19.0 billion in the first quarter to $30.1 billion in the second, which left second-quarter free cash flow at about $1.7 billion [6].
Apple: still the largest buyer
Apple (AAPL) kept buying, but less. It repurchased $62.1 billion of stock in the nine months to June 27, 2026, down 12% from $70.6 billion a year earlier, and paid $11.8 billion in dividends, up slightly from $11.6 billion [3]. Apple still returns more than five dollars through buybacks for every dollar of dividends.
Why dividends are holding up better than buybacks
The two tools serve different purposes, and 2026 shows the difference clearly:
- Dividends are sticky. Boards treat them as a commitment and rarely cut them, so payouts rise slowly and steadily. S&P DJI expects a mid-single-digit gain in 2026 payments [2].
- Buybacks are flexible. Companies can pause them without a signal of distress, which makes them the first source of cash when investment needs rise.
- Capital needs have changed. Goldman Sachs data cited by Fortune show that the largest AI spenders are expected to invest about $755 billion in 2026, up 84% from 2024 [5].
Taxes also play a role. The 1% excise tax on net buybacks, in place since 2023, reduced S&P 500 operating earnings by 0.40% over the 12 months to September 2025 [1]. That cost is small, but it adds to the case for flexibility. From a market perspective, the shift is healthy if the new investment earns more than the company's cost of capital. Shareholders gain either way: through buybacks when a company has spare cash, or through growth when it has profitable projects. The fair counterpoint is that very large capital programs can earn poor returns if demand falls short, and that shareholders who relied on buyback support for share prices lose a steady buyer.
What investors may consider when comparing buybacks and dividends
Dividends deliver cash that is taxable when received, while buybacks raise each remaining shareholder's ownership and defer taxes until the shares are sold. Buybacks only add value when shares are bought below their intrinsic value, and they can mask dilution from employee stock awards. Investors may consider looking at net share count changes, not just announced programs, and at free cash flow after capital spending. Company cash-flow statements, including repurchases and dividends, are available on DataPorium's stock market pages.
In 2026 dividends kept rising while the largest buyback programs were cut or paused to fund AI investment, so buyback totals have stopped growing.
Key takeaways
- S&P 500 buybacks reached a record $1.020 trillion and dividends $664.9 billion in the 12 months to September 2025.
- In the first quarter of 2026, buybacks grew about 1% while capital spending rose 38%.
- Alphabet and Meta made no buybacks in the first half of 2026, and Alphabet raised $49.6 billion of new equity.
- Apple remains the largest buyer, with $62.1 billion in nine months, down 12% from a year earlier.
- Dividends keep growing: the S&P 500 paid a record $78.92 per share in 2025, and a mid-single-digit gain is expected for 2026.
Frequently asked questions
Do S&P 500 companies spend more on buybacks or dividends?
Buybacks. In the 12 months to September 2025, S&P 500 companies spent $1.020 trillion on buybacks and $664.9 billion on dividends, so buybacks made up about 61% of cash returned to shareholders.
Are stock buybacks slowing in 2026?
Yes, growth has stalled. S&P 500 buybacks rose only about 1% in the first quarter of 2026 while capital spending grew 38%, and Alphabet and Meta paused repurchases in the first half to fund AI investment.
Why did Alphabet stop buying back stock in 2026?
Alphabet made no repurchases in the first half of 2026 as it spent $80.6 billion on capital projects, and it raised $49.6 billion of new equity in June to fund AI infrastructure and computing capacity.
Are buybacks or dividends better for shareholders?
Neither is better in all cases. Dividends provide steady taxable cash, while buybacks defer taxes and add value only when shares are bought below their worth; many investors look at both together as total shareholder yield.
Sources & References
- [1] S&P Dow Jones Indices: S&P 500 Q3 2025 Buybacks Post Modest 6.2% Gain to $249.0 Billion, Dec 18, 2025
- [2] S&P Dow Jones Indices: U.S. Common Indicated Dividend Payments Increase $46.4 Billion for 2025, Jan 7, 2026
- [3] Apple: Q3 FY2026 Condensed Consolidated Financial Statements
- [4] Alphabet: Second Quarter 2026 Results, July 22, 2026
- [5] Fortune: Goldman Sachs on the shift from buybacks to capex, June 17, 2026
- [6] DataPorium Stock Market Data (company cash-flow statements)
