Seeing a lot of noise about buybacks supposedly disappearing because companies are prioritizing capex. That's misleading.
Yes, a handful of hyperscalers are pouring cash into infrastructure. But zoom out: corporate America just authorized a record $1.5 trillion in buybacks. The aggregate story hasn't changed.
This matters for valuation. Buybacks reduce share count, flatter EPS, and often prop up multiples without improving underlying business quality. Record authorizations suggest management still sees stock price support as a priority — whether that reflects confidence in intrinsic value or just financial engineering is the question.
Don't confuse a few headline capex stories with a broad shift in capital allocation. The buyback machine is still running at full speed.
Yes, a handful of hyperscalers are pouring cash into infrastructure. But zoom out: corporate America just authorized a record $1.5 trillion in buybacks. The aggregate story hasn't changed.
This matters for valuation. Buybacks reduce share count, flatter EPS, and often prop up multiples without improving underlying business quality. Record authorizations suggest management still sees stock price support as a priority — whether that reflects confidence in intrinsic value or just financial engineering is the question.
Don't confuse a few headline capex stories with a broad shift in capital allocation. The buyback machine is still running at full speed.
