Will a Buyback Wave Boost U.S. Stocks? Top Repurchasers Revealed
In the fourth quarter of 2024, S&P 500 companies set a new record by repurchasing $243.2 billion of their own stock, a 7.4% jump from the prior quarter and an 11% increase year-over-year. For the full year, buybacks surged to an unprecedented $942.5 billion, up 18.5% from 2023.
Top Buyback Leaders
The top three players in the buyback arena are Apple, Google, and Nvidia.
– $Apple (AAPL.US)$: In Q4 2024, Apple repurchased $26.5 billion in stock, up from $25.4 billion in Q3. For the full year, it spent $104.2 billion, compared to $83.9 billion in 2023. Over five years, Apple’s buybacks total $452 billion, and over a decade, a staggering $716 billion—reflecting its massive cash reserves and commitment to shareholder value.
– $Alphabet-C (GOOG.US)$: Google’s Q4 2024 buybacks reached $15.6 billion, edging up from $15.3 billion in Q3. Its 2024 total hit $62.2 billion, slightly above 2023’s $61.5 billion, underscoring a steady approach to capital allocation.
– $NVIDIA (NVDA.US)$: Nvidia spent $9.7 billion in Q4 2024, down from $12.7 billion in Q3, but its 2024 total of $40.6 billion dwarfed 2023’s $12.3 billion. This surge reflects its explosive growth in AI-driven revenue.
Other notable Q4 2024 buyback leaders include $Exxon Mobil (XOM.US)$, $The Kroger Co. (KR.US)$, $Microsoft (MSFT.US)$, $UnitedHealth (UNH.US)$, $T-Mobile US (TMUS.US)$, $General Motors (GM.US)$, and $Chevron (CVX.US)$.
From a buyback rate perspective—measuring repurchases relative to market cap—General Motors and Kroger stand out, with 2024 rates of 12.06% and 11.65%, respectively. GM’s aggressive buybacks signal confidence amid a transitioning auto industry, while Kroger’s reflect strong cash flow and a focus on enhancing shareholder returns in a competitive retail landscape.
2025: Buyback Boom Ahead?
Investors view buybacks as a smart tactic when growth is shaky or dividends less tax-friendly, aiming to steady stock prices amid economic or market unrest. Management often signals confidence by repurchasing undervalued shares, boosting shareholder morale, while fewer shares lift EPS and ROE without profit gains. Many repurchased shares fuel employee stock plans, tying staff to long-term success.
Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, noted that with stock prices retreating in 2025, buyback activity seems to be gaining momentum in the first quarter. He explained that companies are stockpiling shares for employee options and preparing for uncertainties in today's economic and political environment.
Citigroup analysts believe stock repurchasing could serve as a buffer against prolonged market downturns. They predict U.S. buybacks could reach $900 billion in 2025, with the potential to hit $1 trillion if equity markets face persistent pressure.
Goldman Sachs forecasts that companies might dedicate around $1.07 trillion to share repurchases this year, expecting the most significant corporate buyback wave in at least five years to lift stock performance.
Notably, the buyback blackout period looms just a week away. Since 2013, S&P 500 returns during blackout and non-blackout periods have been comparable. Yet, over the last three years, stocks have performed more than twice as well when buybacks are in play.
Final Thoughts
As U.S. stocks navigate choppy waters in 2025, the buyback wave could serve as a stabilizing force. With heavyweights like Apple, Google, and Nvidia flexing their financial muscle, and others like GM and Kroger punching above their weight, stock repurchasing may not only bolster individual companies but also prop up the broader market. Whether this surge sustains Wall Street’s momentum remains to be seen, but for now, buybacks are a powerful tool in corporate America's playbook.
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