One key ingredient behind the stock market’s massive bull run? Buybacks. Corporate buying is on pace for a record 2025, topping the previous all-time high set just last year, according to Howard Silverblatt, senior index analyst at S & P Dow Jones Indices. In 2024, S & P 500 buybacks totaled $942.5 billion. Buybacks are already off to a strong start this year. In July, companies announced buybacks totaling $165.63 billion, a record for the month, according to data from Birinyi Associates. Year to date, that puts buybacks at some $926.1 billion, Birinyi Associates’ data showed. “I expect the second half to increase to and set a record for 2025,” Silverblatt wrote. Announced buybacks are not the same as actual purchases of stock, meaning companies still have to follow through on repurchasing shares after a board of directors authorizes a new buyback plan or increases an existing one. Still, the early data suggests share buybacks are on pace for another strong year. Those corporate treasury actions could help prop up a stock market that is now priced for perfection , even in the face of multiple macroeconomic hurdles and confusion around trade policy from Washington. Nicholas Colas, co-founder of DataTrek Research, said the S & P 500 is selling for 22 times future profits, a level that leaves no margin for error. After all, companies buy back their stock for several reasons. For one, it returns value to shareholders, when there’s surplus cash on hand. For another, it reflects confidence in the fundamental strength of their businesses, but means they see no better use for the cash. It could also be another way to justify a premium for their stock, if earnings growth is slowing. Corporate buybacks reduce the number of shares in the market and, by doing so, enhance future per-share profit numbers. They also provide an extra source of demand for a company’s stock, and can help drive current prices higher.
The stock market’s secret sauce: Buybacks are on pace for a record in 2025
Aug 6, 2025
