This article first appeared on GuruFocus.
US stocks may be about to get another tailwind and it’s not from earnings or rate cuts. According to JPMorgan strategists led by Nikolaos Panigirtzoglou, share repurchases could jump by another $600 billion in the coming years, after already hitting an all-time high of $1.5 trillion in 2025. They argue that buyback volumes are still sitting below the pre-pandemic range of 34% of market cap, currently hovering at just 2.6%. If those numbers revert, the implications for equity supply and investor returns could be meaningful. The US buyback force… is likely to become even stronger, they wrote in a note to clients Thursday.
There’s data to back that up. Globally, buybacks in the first eight months of 2025 have already matched last year’s total. In the US, stocks with the highest buyback ratios have outperformed the equally weighted S&P 500 by nearly six percentage points year-to-date. With IPOs still on ice and public share counts continuing to shrink, JPMorgan sees this supply dynamic as a critical driver of equity strength possibly for a fourth straight year. That backdrop could be especially helpful for large-cap firms like Tesla (NASDAQ:TSLA), which have the flexibility to lean into buybacks while capital remains relatively expensive.
But not everyone’s on board with the upside case. Goldman Sachs strategists, led by Ben Snider, noted this week that buyback activity at S&P 500 firms has recently stalled. Their view? Rising interest rates and a surge in capex particularly into AI infrastructure could dampen repurchase appetite unless valuations reset or investment slows. That divergence between JPMorgan and Goldman leaves one thing clear: while buybacks remain a powerful lever for shareholder returns, their trajectory from here may depend on whether companies stay aggressive or start playing defense.
