AI Is Reshaping a Trillion-Dollar Wall Street Catalyst, and It Has Terrifying Implications for the 2nd-Priciest Stock Market in History

Over 30 years ago, the advent and proliferation of the internet vaulted the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite to new heights. After a multidecade wait, the evolution of artificial intelligence (AI) is having the same effect on equity markets.

The most influential businesses on Wall Street that have embraced AI, such as Google parent Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), social media maven Meta Platforms (NASDAQ: META), and iPhone maker Apple (NASDAQ: AAPL), have been handsomely rewarded. Unfortunately, AI is reshaping a trillion-dollar catalyst for Wall Street, which comes with potentially terrifying implications for the second-priciest stock market in history.

Image source: Getty Images.

The stock market's most influential companies want their piece of a $15.7 trillion pie

Empowering software and systems with the tools to make autonomous, split-second decisions is, arguably, the largest long-term addressable opportunity we've ever witnessed. According to PwC analysts, AI can create up to $15.7 trillion in global economic value by 2030.

There are several ways to approach this technology from an investment standpoint. While hardware providers have shone brightly, thanks in part to graphics processing unit and memory/storage supply shortages, it's AI application companies that are now garnering attention.

Since Alphabet began incorporating generative AI and large language model capabilities into its cloud infrastructure service platform, Google Cloud, sales have accelerated. In the March-ended quarter, this high-margin platform delivered 63% year-over-year sales growth.

"Google Cloud revenues grew 63% with backlog nearly doubling quarter on quarter to over $460 billion."

Analysts Projection: +52% YoY

Google Results:

- Cloud Revenue: +63% YoY
- Cloud Backlog: +300% YoY$GOOGL $GOOG pic.twitter.com/zNkiP1vcd1

-- Qualtrim (@qualtrim) April 29, 2026

It's been a similar encouraging story for Meta Platforms, which has integrated generative AI into its global advertising platforms. Enabling businesses to tailor static and video messages to users can improve click-through rates and bolster Meta's unrivaled social media ad pricing power.

Apple is also benefiting from its rollout of Apple Intelligence, the company's personal AI system built into its physical devices (e.g., iPhone, iPad, and Mac). Apple's sales growth has reignited since the introduction of Apple Intelligence.

Image source: Getty Images.

Aggressive investments in AI come at a steep cost to Wall Street

However, aggressive investments in AI infrastructure have completely reshaped what's been a core catalyst for the stock market since the start of 2018: stock buybacks.

Beginning in 2018, after President Donald Trump's Tax Cuts and Jobs Act was signed into law, the peak marginal corporate income tax rate was permanently lowered from 35% to 21%. With businesses retaining more of their earnings, share repurchases picked up significantly. In 2025, S&P 500 companies were estimated to have repurchased more than $1 trillion of their own stock, according to research by The Motley Fool.

For companies with steady or growing net income, buybacks can boost earnings per share and make them more attractive to value-seeking investors.

But the AI revolution has altered this dynamic. After Alphabet repurchased $346 billion of its stock over the trailing decade (ending Dec. 31, 2025), it announced an $84.75 billion equity offering on June 2 to fund its AI ambitions.

Companies are issuing shares more, buying back less. pic.twitter.com/GbVQ38W59I

-- Cassandra Unchained (@michaeljburry) July 10, 2026

Meta, which has spent over $230 billion on buybacks over the trailing decade (ending Sept. 30, 2025), didn't spend a dime on buybacks in the first quarter of 2026 and, according to reports, has considered an equity offering to build out its AI data center.

Meanwhile, Apple has bought back more of its own stock ($853 billion) since 2013 than any other public company. It's spent 25% less on buybacks through the first six months of fiscal 2026 than it did through the same period in the previous year.

The AI revolution is taking stock buybacks off the table, which may further expose a pricey stock market that's never sustained premiums of this magnitude for any extended period.

Sean Williams has positions in Alphabet and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Apple, and Meta Platforms. The Motley Fool has a disclosure policy.