Record $1.5T buybacks may swell by another $600B: JPMorgan

JPMorgan forecasts significant expansion in U.S. share buybacks, projecting an additional $600 billion beyond this year's record $1.5 trillion, as current volumes (2.6% of market cap) remain below pre-pandemic levels. Globally, 2025 buybacks are set to hit a record $1.9 trillion, up 38% year-over-year. This sustained, high-volume buyback activity, coupled with subdued IPOs, is creating negative equity supply for an unprecedented fourth consecutive year, thereby providing substantial structural support for equity valuations by reducing the publicly-listed share count.

Analysis

JPMorgan analysts project a significant expansion in U.S. share buybacks, with the potential for an additional $600 billion on top of the current record $1.5 trillion annual pace. This forecast is supported by global trends, where buybacks are on track to reach a new record of $1.9 trillion for 2025, representing 38% annual growth based on activity in the first eight months of the year. Crucially, the analysis notes that buyback volumes have outpaced the 15% rise in equity prices this year, indicating a real increase in corporate repurchase activity. Despite the record nominal figures, U.S. buybacks currently represent only 2.6% of total equity market capitalization, which is substantially below the pre-pandemic range of 3%-4% and nearly half the 2007 peak of almost 5%. This gap suggests ample room for further growth. The combination of record-high buybacks and continued subdued IPO activity is creating a state of negative net equity supply for an unprecedented fourth consecutive year, providing a strong structural support for the equity market as the publicly-listed share count continues to shrink.

Key Decisions for Investors

• Given that large-scale buybacks provide a significant structural floor for the market, investors should view this multi-year trend of negative equity supply as a strong tailwind supporting U.S. equity valuations.
• It is advisable to screen for companies with consistent and increasing share repurchase programs, as these firms are directly contributing to a lower share count and may exhibit stronger relative performance.
• Since current buyback levels as a percentage of market cap are still well below historical peaks, investors should factor in the potential for this tailwind to strengthen, potentially justifying a continued or increased allocation to equities.