Big Tech’s Buyback Machine Is Starting to Break

In Berkshire Hathaway’s 2018 shareholder letter, released in February 2019, Warren Buffett showed investors exactly how powerful buybacks can be.

Eight years earlier, Berkshire owned 12.6% of American Express. Berkshire didn’t buy a single new share in that time. Yet its ownership stake had grown to 17.9%.

How? Buybacks.

Every time American Express repurchased its own stock, the number of shares left in the market shrank. Berkshire’s slice of the company grew bigger without spending another dime.

Buffett put it simply: “When earnings increase and shares outstanding decrease, owners, over time, usually do well.”

And the pattern didn’t stop there.

By the end of 2025, Berkshire still owned the same 151.6 million AXP shares. But because American Express kept shrinking its own share float, Berkshire’s percentage ownership of the company had climbed again, to 22.1%.

That’s the power of a shrinking share count.

Every buyback grows your proportional ownership and your claim on the company’s earnings, for as long as management keeps repurchasing shares without overpaying for them. Buffett himself only liked the trade when he believed the stock was underpriced.

That’s why buybacks matter so much to your bottom line. And it’s exactly why what I’m about to show you about AI hyperscalers should worry you.

The Deal That Built Your Portfolio