This year, U.S. stocks have surged, with many companies' stock prices climbing continuously, yet they have not halted their share buyback activities. According to EPFR data, as of the third quarter, the total amount of share buybacks in the All Market of U.S. companies has exceeded 1 trillion USD, likely to break the historical record set in 2022. Among these, the amount of share buybacks by the S&P 500 Index constituent stocks accounts for more than half, with the buyback volume nearing 700 billion USD this year.

According to S&P Global data, the share buyback pattern in the U.S. stock market this year is still dominated by leading technology stocks, with financial stocks and Oil & Gas stocks as the main force. $Apple (AAPL.US)$ Holding the top position in buyback amounts, the cumulative buyback amount as of the third quarter this year is 77.66 billion USD, which is an increase of nearly 27% year-on-year; according to S&P 500 Statistics, Apple has spent approximately 448 billion USD on share buybacks over the past five years, also becoming an important reason for its long bullish stock price.

In the US stock market, the Share Buyback volumes for the second and third spots remained the same as last year, respectively. $Alphabet-A (GOOGL.US)$ and $Meta Platforms (META.US)$ It is worth mentioning that Meta's Share Buyback amount this year has significantly increased to 40 billion dollars, more than 115% growth compared to the same period last year, and the stock has performed very well this year, with an increase of over 75%, ranking among the top in the seven giants.

Among the Technology giants,$NVIDIA (NVDA.US)$ 、 $Microsoft (MSFT.US)$ Also ranked among the top ten share buybacks. Benefiting from the explosion of AI demand, NVIDIA is reaping substantial profits, holding a large amount of Cash / Money Market, with the buyback amount reaching 21.4 billion dollars in the first three quarters, more than double that of the same period last year. In August this year, the Board of Directors also approved a significant share buyback plan of 50 billion dollars.

Bank of America Analysts predict that in the next two years, NVIDIA'sfree cash flowwill reach 200 billion dollars or more. Coupled with the existing large amount of capital, NVIDIA will have approximately 175 billion dollars in idle liquidity by early 2027, surpassing even Apple, the current king of Cash / Money Market, which may provide ample motivation for this AI leader to increase dividends and buybacks in the future.

In addition, Bank Stocks$Wells Fargo & Co (WFC.US)$ and $JPMorgan (JPM.US)$ This year, the repurchase amounts of two well-established repurchase giants have rebounded, each exceeding 10 billion dollars.

Share buybacks are a way for listed companies to provide returns to shareholders by purchasing stock and canceling shares, thereby increasing EPS and share prices. Relevant research indicates that share buybacks and cash dividends are equivalent in terms of shareholder returns. However, listed companies in the U.S. stock market tend to prefer share buybacks, particularly in the Technology Sector.

From a long-term perspective, share buybacks have become one of the important drivers of the rise in the U.S. stock market. In the context where the scale of buybacks is positively correlated with corporate earnings, the upward movement of profits may drive an increase in buyback scale, forming a virtuous cycle of "earnings improvement → increased buybacks → rising stock market."

Taking the S&P 500 Index as an example, from the quarterly buyback scale since 2007, there is a certain positive correlation between the buyback scale of S&P 500 constituents and the index trend, and from the performance of the U.S. stock market this year, this pattern seems to still hold.

According to institutional analysis, there are generally two periods of vigorous repurchase activity: the first is in the later stages of interest rate hikes and when rates peak, where economic prosperity results in strong corporate earnings and ample cash flow, leading to active buybacks; the second is during periods of low interest rates and cheap financing costs, where corporate valuations are generally low, and the willingness to borrow for buybacks is strong. With the arrival of the rate cut cycle, a new wave of buyback frenzy may be initiated, bringing more opportunities for investors.

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