Despite recent declines in tech stocks, major U.S. tech companies are planning significant stock buybacks exceeding $500 billion. This move serves as a stable force amid market uncertainty. Companies like Apple (AAPL, Financial), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), and Meta Platforms (META) are sticking to capital return strategies despite economic pressures from tariffs and rising costs.
Bloomberg analyst Robert Schiffman highlighted that companies with substantial cash reserves, such as $30 billion to $100 billion, find it unnecessary to halt buybacks due to uncertainties. Alphabet plans to reveal its buyback intentions in its upcoming earnings report, following last year's $70 billion buyback announcement. Apple is also set to announce its capital return plans soon, having budgeted $110 billion for buybacks previously.
Although AI infrastructure investments are increasing capital expenditures, tech giants maintain strong cash flows. Analysts estimate that by early 2025, leading tech firms will generate around $100 billion in free cash flow. Recently, Broadcom (AVGO) announced a $10 billion buyback, its first since 2022, reflecting confidence in long-term growth.
Market experts view buybacks as a financial stability indicator and shareholder value enhancement, especially amid significant stock price corrections. The NASDAQ 100 has fallen about 15% from its peak, with Apple and Alphabet down 20% and over 24%, respectively. Buybacks are expected to support stock prices and curb declines.
