Apple, Meta power 27% of Q2 S&P 500 buybacks despite 20% drop

In Q2, S&P 500 companies spent $234.6 billion on stock repurchases, a 20% drop from Q1 but stable compared to last year, with technology companies like Apple, Meta, and Alphabet leading the way.

The decline in buyback activities was influenced by increased uncertainty surrounding tariffs and economic policies, causing companies to adopt more cautious cash spending strategies.

The top 20 companies represented over half of all buyback spending, indicating significant concentration, while the utilities sector was notable for increasing its buyback spending despite declines in other sectors.

Looking ahead, if market volatility decreases and policies become clearer, buybacks are expected to rebound to near-record levels in Q3, with overall shareholder returns projected to reach unprecedented heights for 2025.

Recommendation Rating: Moderate Caution

In the second quarter, S&P 500 companies allocated $234.6 billion towards stock repurchases, representing a 20% decrease from the unprecedented spending seen in the first quarter. However, this figure remained relatively stable compared to the same period last year. The information technology sector remained the frontrunner in buyback initiatives, despite a 16.3% reduction in their spending. Noteworthy contributors to buyback activities included Apple (NASDAQ:AAPL), Meta Platforms (NASDAQ:META), Alphabet (GOOGL), and NVIDIA (NVDA), which collectively comprised nearly 27% of the total buybacks within the S&P 500. Apple particularly stood out, maintaining its position as the leader in individual company buybacks, spending significantly in Q2 2025, ranking as the tenth highest in S&P 500 history.

Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, indicated that the slowdown in buybacks during the second quarter was largely attributed to heightened uncertainty regarding tariffs and economic policies, prompting corporations to exercise more caution in their cash expenditures. The participation rate in buybacks fell to 67.6%, down from 76.8% in the first quarter, but was still viewed favorably against the backdrop of market uncertainty.

The concentration of buybacks was noteworthy, with the top 20 companies accounting for 51.3% of total buyback spending, surpassing both recent averages and those from before the COVID-19 pandemic.

In contrast, the utilities sector was the only group to increase its buyback spending, reporting a 16.5% rise over Q1 2025. Conversely, the healthcare sector saw a 39.3% decrease, while the technology and communication services sectors experienced declines of 16.3% and 15.0%, respectively.

Looking ahead to the third quarter, the S&P report suggested that as market volatility subsides and policy clarity improves, companies are likely to feel more confident in planning and executing their spending strategies. Expectations point towards buybacks returning to levels close to those witnessed in the record first quarter.

For the entire fiscal year of 2025, estimates indicate that shareholder returns from S&P 500 companies through buybacks and dividends are anticipated to reach unprecedented levels, with buybacks expected to see double-digit growth and dividends predicted to increase in the mid-single digits, according to Silverblatt.