Deep Dive: How Stock Buybacks Affect Share Price and Earnings — Why Big Tech Spends Billions Repurchasing Its Own Shares
When Apple reported its fiscal year 2025 results, a striking figure stood out beyond the $112 billion in net income: the company spent $90.7 billion repurchasing its own stock. Apple isn't alone. Over the past four fiscal years, just four companies — Apple, Alphabet, Meta, and Microsoft — have collectively spent more than $775 billion buying back their own shares. That's more than the GDP of most countries, funneled into a single corporate finance mechanism that many retail investors still don't fully understand. Stock buybacks have become the dominant way Big Tech returns capital to shareholders, eclipsing dividends by a wide margin. But the mechanics of how buybacks actually affect your portfolio — from boosting earnings per share to influencing valuation multiples — are often glossed over in financial media. Understanding these dynamics is essential for any investor trying to evaluate whether a stock's earnings growth is real operational improvement or financial engineering. This guide breaks down how buybacks work using real data from four of the world's largest companies, explains why they matter more than most investors realize, and offers a framework for evaluating whether a company's repurchase program is genuinely creating shareholder value.