Some investors worry the S&P 500 is overvalued. But apparently some companies see their own stock as a screaming buy.
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Ten S&P 500 companies, including Apple (AAPL), Alphabet (GOOGL) and Nvidia (NVDA), each spent more than $3.5 billion buying their own stock in the third quarter, says just-released data from S&P Dow Jones Indices’ Howard Silverblatt. The value of share buybacks by these 10 companies is up a whopping 42.9% from the same year-ago period.
Seeing such commitment to shares is an anomaly in the market. S&P 500 companies at large cut their spending on stock buybacks by 4% in the third quarter, Silverblatt says. That’s a potential issue as it means companies’ profit needs to be divvied up among more shares.
“The impact has been a reduced upward impact on EPS and less buying support for stocks,” Silverblatt said.
The Big S&P 500 Spender On Buybacks
Warren Buffett may have unloaded many of Berkshire Hathaway’s shares of Apple. But the company itself is loading up.
Apple spent $25.4 billion buying its own stock in the third quarter of 2024. That’s up 19.2% from the same year-ago period. Apple has been a surprisingly strong performing stock in the back half of the year. The stock is up roughly 29% in 2024 — despite the maturation of the smartphone market and regulatory concerns of the company’s monopoly.
It’s simply a factor of the fact the company is still finding ways to grow. Analysts think profit will rise 9% in 2025 and another 12% in 2026. The stock sports a Composite Rating of 89 thanks to its robust fundamentals and strong stock price.
Other Big Tech Spenders
It’s interesting to see other giant Magnificent Seven stocks, which dominate the S&P 500, aggressively buy their shares, too.
Google parent Alphabet is the next largest buyer of stock following Apple. It bought $15.3 billion of its shares in the third quarter. That’s down about 3%, though, from the same period a year ago. Alphabet’s stock has done even better than Apple’s this year, rising 36.4%. That gives Alphabet stock an RS Rating of 85. And analysts see strong growth. They’re calling for 40% EPS growth in 2024 and 12% in 2025.
AI darling Nvidia, too, is spending heavily on its shares despite the share price jumping 171% this year. Nvidia dropped $12.7 billion on its stock in the third quarter, up 176% from the same year-ago period. Nvidia has become a “do no wrong” stock this year with an RS Rating of 94 and Composite Rating of 96. Analysts think its profit will rise 127% in 2025 and 50% in 2026.
To be sure, many of these companies are buying shares simply to soak up the shares being created to award employees stock. It’s also important to point out that companies, historically, aren’t the best market timers and tend to buy shares at the wrong times.
It’s still noteworthy, though, that as others worry about valuations, these companies are loading the boat.
Biggest S&P 500 Buybacks (in billions)
Based on third quarter of 2024
| Company | Symbol | Q3 2024 buybacks | Buyback ch. from year ago |
|---|---|---|---|
| Apple | AAPL | $25.4 | 19.2% |
| Alphabet | GOOGL | 15.3 | -3.2% |
| Nvidia | NVDA | 12.7 | 176.1% |
| Meta Platforms | META | 12.4 | 117.5% |
| JPMorgan Chase | JPM | 6.4 | 166.7% |
| Visa | V | 5.9 | 55.3% |
| Exxon Mobil | XOM | 5.5 | 25.0% |
| Chevron | CVX | 4.7 | 42.4% |
| Microsoft | MSFT | 4.1 | -14.6% |
| Bank of America | BAC | 3.5 | 250.0% |
| Total | $95.9 | 42.9% |
