Apple is likely to boost its buyback program by another major sum on Thursday — further differentiating itself from many of its “Magnificent Seven” peers, who are seeing their cash levels rapidly deplete as they spend heavily on artificial intelligence.
Alphabet, Amazon.com, Meta Platforms and Microsoft are betting that large upfront investments in data centers will deliver value down the road. Meanwhile, Apple is choosing to return cash directly to shareholders through dividends and stock buybacks.
In 2024, Apple announced a record $110 billion share buyback, and followed that up with a $100 billion buyback last year. The six largest buyback announcements in U.S. corporate history all belong to Apple, according to data from Birinyi Associates. (The company jointly occupies the No. 7 spot as well, alongside Chevron.)
Charles Rinehart, chief investment officer at Johnson Investment Council, anticipates a similar level of buybacks from Apple in 2026 relative to what it’s announced in recent years, as well as a mid-single-digit increase in the company’s cash dividend.
“It’s a big underlying demand driver for the stock … and it ensures that this massive cash hoard doesn’t build up on the balance sheet, which was an issue prior to the initiation of the dividend,” Rinehart told MarketWatch. Apple CEO Tim Cook reinstated dividends in 2012, and in 2018 the company announced a goal to become “net cash neutral” over time.
Microsoft has issued a steady dividend since 2003. More recently, Meta and Alphabet instated dividends in 2024. But now, these companies will have to see if they can balance their massive AI spending with direct returns to shareholders.
Alphabet, Microsoft, Amazon and Meta Platforms will all announce earnings results after the market close on Wednesday. Apple will follow with its own report after the close on Thursday.
Ahead of earnings, let’s take a long look back to see how the five companies have made use of buybacks and how they have managed their dividends (if any).
Buybacks and share-count reductions
If a company issues common stock for any reason, the number of shares increases and the dilution lowers earnings per share. Then again, raising money to expand the business can increase revenue and profit.
Buybacks aren’t the only factor impacting the number of shares outstanding. Large companies tend to issue stock to give to executives as part of their compensation, which raises the share count.
Some buybacks might only serve to mitigate the dilution caused by heavy stock-based compensation. What investors want to see are “net buybacks” — those that are significant enough to lower the share count and push earnings per share higher.
In the case of Apple, the company’s average diluted share count during its most recent reported fiscal quarter was 33.8% lower than the share count 10 years (40 fiscal quarters) earlier. This had the effect of increasing EPS by 51%.
Here is a look back at how much the five Big Tech companies reporting results next week have spent on stock buybacks over the past five years and how much their share counts have changed, followed by separate data to show what they have done over the past 10 years. The companies are sorted by market capitalization.
The total returns include reinvested dividends. They compare with a five-year return of 60% for the S&P 500.
Among the five companies, Apple has spent the most on buybacks over the past five years and has lowered its share count by 13.5% in that period. But Alphabet has lowered its share count by 7.4% over the past year and 16.1% over the past five years.
Amazon has spent $6 billion on buybacks over the past five years, but its share count has increased nearly 6%.
Now let’s look at the 10-year data:
Apple is far in the lead for 10-year share-count reduction. Alphabet’s share count five years ago was higher than it was 10 years ago. Amazon’s share count increased for both the five-year and 10-year periods.
Apple had the highest 10-year total return of 1,042%, which compared with a return of 303% for the S&P 500 over the same period.
Dividend compounding
These tech-oriented companies aren’t known for high dividend yields on their stocks. But there is something interesting to see in the data: If you buy stock in a company that pays a small dividend or no dividend, but then hold the shares for many years, new or increasing payouts might lead to a good dividend yield based on what you paid for your shares.
Here is a look at five-year and 10-year compound annual growth rates (CAGR) for dividend payouts and what the dividend yields would be on shares held for five years and 10 years. We are leaving the companies in the same order aside from Amazon, which doesn’t pay a dividend.
For Alphabet and Meta, there are no dividend CAGRs because both companies started to pay quarterly dividends in 2024.
Microsoft’s 10-year dividend CAGR has been more than 20%. If you had purchased Microsoft’s stock at the close on April 22, 2016, and held the shares since then, the dividend yield on your 10-year-old shares would be 7.03%.
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