New York, May 5, 2026, 11:11 EDT
Netflix’s bigger share buyback is drawing attention to how companies are handling their cash, with investors now sizing up buybacks like Netflix’s against Microsoft’s much heftier $190 billion commitment for AI and cloud infrastructure this year. After recent dips in their stocks, Netflix, PulteGroup, and Mobileye are all doubling down on repurchases. Microsoft, meanwhile, is turning to shareholders, seeking support for yet another ramp-up in capital spending.
The timing is key now that big growth names aren’t getting leeway on how they spend their cash. Buybacks do boost earnings per share by cutting the share count, but they also spark debate about whether that money would be better put to work elsewhere. AI capex—think heavy spending on data centers, chips, and servers—brings its own dynamic: those investments need to translate into revenue quickly to make the costs pencil out.
Tuesday’s session reflected that divide. Near midday in New York, shares of Netflix slipped around 2.3% to $88.89. Microsoft edged 0.8% lower at $410.14. Meanwhile, PulteGroup climbed roughly 2.6%. Mobileye posted gains of under 1%. The Invesco QQQ Trust, which tracks major tech names, added about 1.2%.
Netflix’s board signed off on an extra $25 billion for share repurchases, with no set end date—this stacks on top of the roughly $6.8 billion still available from the previous program. Reuters noted the move follows Netflix’s decision to exit a potential Warner Bros Discovery asset purchase, a step that triggered a $2.8 billion breakup fee for Netflix. Emarketer’s Ross Benes said the new buyback “provides some answers” about how Netflix might use its cash now, though, in his words, it “doesn’t entirely show” how reinvestment will look. Reuters
So Netflix isn’t exactly a straightforward value pick. A Simply Wall St piece, hosted by Yahoo Finance, called the stock “mixed” when shares sat at $93.61. Another Simply Wall St take floated a $149.37 fair value, stacking that up against a $92.12 close. That same report pointed out Netflix was trading at about 29 times earnings, which puts its P/E ratio right around the U.S. entertainment industry average. Yahoo Finance
PulteGroup’s board just added $1.5 billion to its buyback program, lifting total authorization to $2.1 billion. That decision comes as the company’s first-quarter net income slipped to $347 million—down from $523 million a year ago. Home-sale revenue also fell 12%. CEO Ryan Marshall cited ongoing worries over “affordability and the economy” from buyers. Even so, net new orders edged up 3%. SEC
Mobileye’s $250 million repurchase stands out for its focused approach. The driver-assistance tech firm said the buyback is intended in part to counter dilution from stock grants and shares issued as part of its Mentee Robotics deal. ADAS—short for advanced driver-assistance systems—covers features like vehicle sensing, warning alerts, and some automation. CEO Amnon Shashua called buybacks at “current valuation levels” a prudent move, but emphasized that R&D is still the top use of capital. Mobileye
Microsoft’s taking a different tack: spending upfront, results to follow. Fiscal Q3 revenue landed at $82.9 billion, a jump of 18%. Net income climbed 23% to $31.8 billion. Azure and other cloud services surged 40%. CEO Satya Nadella told investors the company’s AI business is now running at a $37 billion annualized revenue pace.
What’s raising eyebrows is just how big this buildout is shaping up to be. According to a Motley Fool piece out Tuesday, Microsoft’s capital spending for 2026 came in 23% above what analysts were projecting, with surging memory prices piling on. On the latest earnings call, CFO Amy Hood put capex for 2026 at around $190 billion—about $25 billion of that due to pricier components. Hood added that capacity will stay tight, at least through 2026.
Competition is muddying the picture on spending. Reuters pointed out Azure’s 40% growth, which lagged Google Cloud’s 63% surge at Alphabet. Amazon, for its part, now hosts OpenAI’s newest models and the Codex coding tool on its cloud. Microsoft has brought Anthropic’s tech into both its cloud and Copilot lines, and tweaked its OpenAI deal—less exclusivity now.
The downside isn’t hard to see. Repurchasing shares can boost per-share metrics, but that won’t solve weaker streaming outlooks, housing affordability headwinds, or sluggish tech rollouts in autos. Microsoft faces a different kind of squeeze: if cloud revenues don’t pick up speed and expenses like chips and leases remain elevated, margins could take a hit before AI investments deliver any payoff.
Tuesday’s action made clear: not every cash-return plan gets the same reception. Pulte and Mobileye shares caught a bid, but Netflix slipped—even with its bigger buyback. Microsoft, for its part, lost ground, even as the rest of tech ticked higher. The takeaway is direct: either companies scoop up undervalued stock, or they’ll need to shell out for the kind of growth Wall Street wants to see.
