Money. Companies exist to make it. Or at least that’s the way it is in the US.

Companies do other things too, but it’s not a coincidence that “bottom line” is a synonym for “crux” in America.

Let’s say you’re a company and you exemplify your raison d’être, which is to say you make a lot of money. The question you ask yourself next is, “What do we do with it?”

In theory, you could give some of it — or even most of it — back to your employees, which is to say to the people who actually manufacture the goods you sell or deliver the services you provide, but… well, but f–k those people, amirite?!

I’m kidding. Not really, though. American capitalism is shareholder capitalism. That’s who counts. The shareholders. Notwithstanding the uptick in organized labor activity post-pandemic and the media attention afforded to a few high-profile collective bargaining soap operas, labor as an economic actor remains a shadow of its pre-1980s self. That’s not going to change.

Of course, none of that’s to say corporate America squanders all of its free cash on buybacks. You do have to invest for growth and unless your business is — I don’t know, candle-making or something else that was mostly perfected hundreds of years ago — you do have to spend on R&D.

If you’re a shareholder, you’re probably opposed to any kind of “over”-spending on labor, but you’re not necessarily against capex and research, as long as you get your cut and as long as the CEO can tell some semi-plausible story about how that capex and research has the potential to make your cut larger eventually. With that in mind, the table below gives you a sense of how corporate America might spend the money it makes next year.

The table comes from Goldman’s David Kostin, whose long-running “Weekly Kickstart” series is like a high-end chain restaurant: Boring as hell, but reliably — infallibly — decent. (That’s a compliment, David. You should hear what I say about your peers.)

As you can see, Goldman expects US corporates to spend nearly $4 trillion next year, contingent, as ever, on the trajectory of earnings.

As a quick reminder: Kostin’s top-down estimate for bottom-line aggregate index earnings growth in 2025 is 11%. Bottom-up consensus is at 15%.

Those of a skeptical persuasion perceive some tension between expectations for double-digit profit growth and the prospect of ~150bps to 200bps of Fed cuts over the next 12-18 months. Those two things are incompatible on some interpretations, but that’s another discussion.

On Kostin’s estimates, the C-suite will allocate around half of cash spending next year to capex and R&D, and 45% to shareholder returns. Do note the implied growth rates: Buybacks are seen growing by 15%, or roughly twice the pace of capex and considerably quicker than R&D.

As far as the breakdown, Goldman expects some “broadening” out consistent with the — still largely unproven — assertion that earnings growth itself is poised to broaden beyond the mega-caps. “Mega-cap tech stocks have been boosting aggregate cash spending, but we expect a broadening in 2025,” Kostin said, noting that in 2024 (i.e., this year), the top 10 S&P 500 “spenders” increased their outlays by 36% during Q1 and Q2 versus the same period a year ago, compared to just 7% for the other 490 names in the index.

“Looking into 2025, cash spending will likely broaden,” Kostin went on, suggesting that “the gap in earnings growth between mega-cap tech and the median stock [may] narrow and capex spending growth among the hyperscalers is likely to decelerate.” And here I thought the whole rally — indeed the whole world — depended in one way or another on AI “hyperscaler” capex.