3 Tech Leaders Announce Buybacks Totaling $85 Billion

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3 Tech Leaders Announce Buybacks Totaling $85 Billion

Markets have become especially accustomed to tech buybacks in recent years. According to S&P Dow Jones Indices, companies in the S&P 500 tech sector spent a whopping $253 billion on buybacks in 2024.

This represents by far the highest level of buyback spending by any sector, accounting for nearly 27% of the total. Following suit with the tech sector’s buyback dominance, three huge tech names have announced large increases to their share buyback programs.
Together, these buyback programs equal $85 billion. For reference, that is about the same size as HCA Healthcare (NYSE:), the largest for-profit hospital operator in the United States. Below are the details. Unless otherwise indicated, all data and metrics use information as of the May 2 close.

1. KLA: Chip Company Announces Big Buybacks and Dividend Boost

First up is KLA. This company may not have the same name recognition as the other two on this list, but semiconductor investors know it well. KLA is one of the world’s most important players in the semiconductor manufacturing equipment industry.

KLA MarketRank

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• Overall MarketRank

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• Analyst Rating: Moderate Buy

• Upside/Downside: 15.5% Upside

• Short Interest Level: Healthy

• Dividend Strength: Strong

• Environmental Score: -1.69

• News Sentiment: 0.98

• Insider Trading: Selling Shares

• Projected Earnings Growth: 1.58%

Industry experts recognize KLA as one of the leaders in chip inspection and metrology equipment. Inspection equipment ensures that fabricators make semiconductors without defects, and metrology equipment helps properly measure semiconductors’ microscopic features.

KLA recently announced a $5 billion increase to its share buyback authorization. Now, the company has just under $5.5 billion in share buyback capacity. That is a substantial amount, equal to nearly 6% of the company’s total market capitalization. This gives the firm the ability to decrease its outstanding shares notably, providing a tailwind to earnings per share (EPS). KLA also announced a significant increase to its quarterly dividend of almost 12%.

The company has not officially announced the dates for this dividend. However, the next record date is usually in mid-May, and the next payable date is usually on June 1. The stock has an indicated dividend yield of around 1.1%.

2. Dell’s Buyback Capacity Is Huge, But How Fast Will The Company Use It?

Next is Dell Technologies (NYSE:). The company, which is active in consumer electronics and enterprise servers, announced a $10 billion increase to its share repurchase authorization. The company did not state its total capacity now, but this buyback authorization is very large for Dell.

Dell Technologies MarketRank

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• Analyst Rating: Moderate Buy

• Upside/Downside: 41.9% Upside

• Short Interest Level: Bearish

• Dividend Strength: Moderate

• Environmental Score: -1.15

• News Sentiment: 1.01

• Insider Trading: Selling Shares

• Projected Earnings Growth: 17.75%

It is equal to an enormous 15% of the company’s $66 billion market cap. Over the past three fiscal years, the company has spent just under $9 billion on buybacks.

It will be interesting to see if the firm sticks to this buyback spending pace or accelerates it due to the market downturn. This could provide a sign of how confident the company feels in the stock’s appreciation.
Dell also announced a substantial 18% increase to its quarterly dividend, now just under $0.53 per share. While the latest payout has already been made, investors can still capture future dividends, with the stock currently yielding around 2.2%.

3. GOOGL: Creates Solid Buyback Capacity, Dividend Increase Is the Cherry on Top

Last up is the head honcho of this group, Alphabet (NASDAQ:). This big tech name, and one of the top five largest stocks in the world, announced a $70 billion share buyback program. The company also didn’t say how long it will take them to use this capacity, but it’s safe to assume that it will make fairly quick work of it.

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• Analyst Rating: Moderate Buy

• Upside/Downside: 21.2% Upside

• Short Interest Level: Healthy

• Dividend Strength: Weak

• Environmental Score: N/A

• News Sentiment: 0.83

• Insider Trading: Selling Shares

• Projected Earnings Growth: 14.94%

Over the last 12 months, Alphabet spent nearly $62 billion on buybacks. This buyback capacity is certainly worth noting, but it isn’t crazy for a company worth around $2 trillion. It represents about 3.5% of the company’s market cap, allowing it to give its EPS a moderate tailwind.

Alphabet also announced a dividend increase, like the other two firms on this list. However, it is far less substantial at just 5%. The company’s next $0.21 quarterly dividend will be payable on June 16 to shareholders of record on June 9. This gives the company an indicated dividend yield of just over 0.5%. Although small, it aligns with the other names in the Magnificent Seven, none of which have a yield over 1%.

All in all, it’s great to see tech companies not only using big-time buybacks to return capital, but also boosting dividends. Both provide important avenues through which companies can support shareholders and the returns they hope to receive. In times of uncertainty like now, doing so can be as valuable as ever.

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