Below, for Q2, you’ll see Nvidia’s $3.1 billion buyback, which was its largest on record, as was also the case for Amazon’s $3.3 billion buyback. Tech companies account for approximately 35% of quarterly buyback spending, the largest share of any sector, according to investment research management firm VerityData.įor the second quarter of this year, here's what we're talking about. Second, Big Tech is a huge fan of buybacks. In 2021, S&P 500 companies bought back $882 billion of stock, breaking records. Though there's limited agreement about what the long-term effects of buybacks are, how they affect the economy in the aggregate, and what's to be done, two things are clear.įirst, buybacks are at this point incredibly common. Even President Biden has taken notice, levying a new tax on buybacks just this year. Meanwhile, proponents will say that buybacks are a way of re-investing in their companies, putting extra cash to work. These types of share re-purchases are controversial, because they often are positively reflected in earnings per share (EPS) and, consequently, in the value of the company's stock.Ĭritics fear that buybacks, which are often debt-financed, contribute to financial fragility across the markets, though some studies have suggested the system-wide effects of buybacks are finite. Sure, this has been the case for years, but we're seeing companies like Apple ( AAPL), Alphabet ( GOOG, GOOGL), Amazon ( AMZN), and Nvidia ( NVDA) doubling down on buybacks, which are when a company buys its own stock, reducing the overall share count.
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