Alphabet Inc.

Alphabet is very effective at deploying capital for shareholder value. It invests heavily in high-return areas (expanded data centers, R&D in AI, product development) to grow the core business.

Unlike many tech peers it also returns surplus cash through enormous stock buybacks: about $62B of shares repurchased in 2024, on top of over $100B in the prior two years combined. This materially reduces share count and boosts per-share metrics, roughly offsetting dilutive stock compensation.

Management has no significant dividend (preferring buybacks), which we view as appropriate given growth opportunities. Acquisitions have been selective (e.g. YouTube, Android were transformational), but today inorganic spend is relatively modest.

The capital allocation track record is highly disciplined: focusing on organic investment first, then opportunistic buybacks. The result is very high returns on invested capital (well above 20% consistently) and minimal dilution.