Companies increasingly prefer stock buybacks over dividends to return value to shareholders, indicating management's confidence in their own stock's growth potential.
Stock buybacks signal a bullish sentiment among management, as firms invest in their own shares instead of paying dividends, enhancing earnings per share.
Despite a tax on buybacks beginning in 2023, companies have ramped up their repurchase programs, with Goldman Sachs predicting a rise to $1 trillion by 2025.
Major companies like Apple and Alphabet are making significant buyback announcements, which serve to strengthen investor confidence in their operational performance.
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