Charted: Stock Buybacks of the Magnificent Seven
By 2025, Goldman Sachs predicts that total U.S. stock buybacks will exceed $1 trillion. The bank sees this growth being driven by strong tech earnings growth and lower rates.
But what are buyback amounts like for the largest tech companies today?
This graphic looks at the total value of shares each Magnificent Seven company has repurchased in the last four quarters using data from their latest financial statements.
What is a Stock Buyback?
A stock buyback is when a company buys their own shares to reduce the number of available shares on the market. Companies may choose to buy back stock to return value to shareholders. Having fewer shares available improves earnings per share, and may drive up the stock price.
Buying back stocks can also come with risks, such as using up cash that would otherwise be put toward growing the business.
Stock Buybacks of Tech Titans
We gathered data from company financial statements to see how stock buyback amounts differed among the Magnificent Seven. Each total represents what companies reported from June 1, 2023 to June 1, 2024.
As we can see, the tech companies in the Magnificent Seven have been the ones buying back their stock over the past year.
| Company | Total Stock Buybacks | Buybacks as a % of Market Cap |
|---|---|---|
| Apple | $83B | 2.8% |
| Alphabet (Google) | $63B | 2.9% |
| Meta | $25B | 2.0% |
| Microsoft | $20B | 0.6% |
| Nvidia | $17B | 0.6% |
| Amazon | $0B | 0.0% |
| Tesla | $0B | 0.0% |
Values rounded to the nearest billion. Company market caps are as of June 6, 2024.
Apple had by far the most share repurchases, raising its diluted earnings per share from $1.26 to $1.53. Going forward, Apple authorized an additional $110 billion for share repurchases, a U.S. record. The board says the repurchases are in light of their “confidence in Apple’s future and the value we see in our stock.”
On the flip side, both Amazon and Tesla did not issue stock buybacks in the last four quarters. Amazon’s CFO Brian Olsavsky recently emphasized the company’s strategy of reinvesting in the business. He says Amazon is focused on reducing debt and building data centers to take advantage of AI.
Información extraída de: https://www.visualcapitalist.com/stock-buybacks-of-the-magnificent-seven/
