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The stock market rally has added $16 Trillion in market capitalization so far this year, and momentum is still in the drivers’ seat. What, if anything, can slow the rally down?
Legendary tech investor Dan Niles breaks down the bull between the horns but warns of a fowl Thanksgiving surprise. Plus, investors are hoping for more rate cuts than the Fed is planning on, at least for now… Why this mismatch could lead to unfulfilled expectations. And stock buybacks are making a comeback. Which companies eat their home cooking more than others?
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Full Transcript:
Caleb Silver
On the express this week, the $16 trillion market melt up. Small caps are surging. The dot plot disconnect protecting us. Tech investing legend Dan Niles drops in for a few good minutes, are buybacks, back the Investopedia indicator and walk to watch this week, microphone test, one, two. What is this? It’s the Investopedia express all up in your business.
Welcome back and welcome aboard. Stocks coming off of record highs last week, the summer melt up continues, just as we transition into fall here, we’re going to get in to what’s been surging and what could go wrong in the next few minutes, but look at the stock market record highs all around. Can I get an air horn, please? Maybe, maybe not, but at least Peter captain, there it is. I know Peter Tuckhman, my guy at the stock exchange, the Einstein of Wall Street’s happy. We got record highs for the Dow, for the S&P 500, for the NASDAQ and small caps are surging. Why? Small caps love those lower interest rates. We’ll get into that in a quick in a couple of quick seconds. Here, there is my guy, Peter the Einstein of Wall Street. Just think about this $16 trillion surge so far this year for the S&P 500. Stock market’s up 13.3% we know we had that almost almost bear market early in April, but things have been turning up and to the right ever since, and this is all despite the threat of tariffs. A lot more smoke there than fire, at least at this point, geopolitical instability, pretty much everywhere you look, confusing economic policy, just to say the least, questions about AI and the trillions of dollars being spent on it by the super scalers. But on the other hand, you got growing corporate profits, you got more productivity gains, you got a weak dollar, you got low oil prices, you got fairly contained yields on treasuries and Japanese bonds. You got almost zero volatility. It’s been like the quietest summer ever for volatility, lighter regulation. We know this administration is going real light on the regulation, lower corporate tax rates, the US government investing billions of dollars in public companies, and interest rates headed down and to the right. And you know, who likes lower interest rates? Small cap stocks finally hitting a record high. Took a very long time, 967 trading days for the Russell 2000 to hit an all time high. That is a very long time in trading days. That’s several years. Why they love those lower interest rates, but they’ve been higher for a while. There you go. There’s a chart there from our friends at Bespoke investments. The last 15 years. Took a very long time. It’s been a sideways trade for small cap stocks, but small cap stocks love lower interest rates.
Why? They borrow a lot of money, and when rates go down, they get to refinance their debt. Makes their balance sheets look a lot prettier. They can expand a little bit, gives them a little breathing room. So small caps at record highs as well. Finally, after about four plus years, and when you look at what’s good, the vibes inside the stock market right now, according to BofA global fund manager survey, fund managers around the world, they’re as optimistic as they’ve been in seven months. Well, welcome to the party. We’ve had nothing but a bull market throughout all this chaos for the last 20 years or so. They’re finally bullish again, but even through this year, they were very tepid coming in even after the rally started, global fund managers were pretty trepidatious, but now at a seventh month high in terms of their optimism, their equity allocation also at a seven month high. Their cash levels, 3.9% that’s really low for fund managers right now, 58% though they think the market is overvalued, but they’re buying. They keep buying, and they think interest rates are headed lower. They’re right, but maybe, just maybe, they think that they’re headed lower a little faster and a little sooner and a little more aggressively than the Fed thinks that we did get that Fed rate cut last week, that quarter point cut we knew was coming, that was about as well telegraphed as it could be.
But we also got the summary of economic projections and the most boring yet the most important chart in the world of economics, finance and the stock market right now, that is the Fed stock plot. Let’s put it up here. The Fed stock plot showing rates headed lower right, maybe one, maybe two cuts by the end of this year, but maybe a couple more cuts by the end of next year. When you look at the Fed funds rate, where traders and investors are pinning the Fed funds rate for the end of 2026 it’s right around 3% that is fairly lower than it is today. At 4% that’s a big drop, and we’ve been waiting a long time for rates to come down. But there may be a disconnect there between what investors perceive. Rate as the vol as the amount of rate cuts and the velocity of rate cuts and what the Fed actually thinks. But we do know this is going to be a much more dovish fed. And we do know with more influence from the White House on this federal reserve one way or the other, rates are coming down and will probably stay that way for a while.
But the disconnect is interesting, and meanwhile, while the stock market’s rallied up into the $16 trillion melt up near record highs, there’s still a ton of cash on the sidelines, more than $7 trillion in money market funds. I’m not saying that money is going to come out of money market funds and go into the stock market, but it’s got to go somewhere, and yields at around 4% for money market funds, well, still pretty attractive to savers and to older investors and some institutions that need to hold on to cash. But we, as we just said, global fund managers, only have 3.9% on average allocation to cash right now, so that is a lot of money sitting on the sidelines, earning three to 4% maybe at some point, some of it gets loosened up and thrown back into the stock market, where we’ve seen nothing but a charts that had up into the right since about April 9, but that’s something we’re going to watch super closely. But somebody who watches this whole thing very closely, and someone I’ve learned a ton from over the last 20 or 25 years, watching his takes on tech, reading his research, listening to him across business media, is Dan Niles from Dan Niles Investment Management. He’s going to drop in for a couple of good minutes coming right up.
Dan, so good to have you on the Investopedia Express. Thanks so much for rejoining the show. Good to have you back on. It’s been a couple of years, but I’ve been watching and reading your stuff very closely. Thanks for joining
Dan Niles
My pleasure, Caleb.
Caleb Silver
You talked about it in a bunch of your recent notes, and in your mid year outlook, there was a prudent, irrational exuberance going on, but you actually entered this year super bearish, but have turned around your thinking on that. Obviously, things have changed since the beginning of the year in a lot of ways, but when you think about how your mindset has changed as an investor putting money to work, especially watching the tech sector, which I know you watch pretty closely. When was that ship? Was it mid April? Is it April 9, when the President relaxed some of those tariffs?
Dan Niles
It was actually a couple of days before I had a TV interview, and I said, you know, a shorting volatility. I thought the market was oversold, and for about 48 hours. It was scary because the market was was still choppy, and then, because my main thought was, look, this downdraft wasn’t caused by a recession, it wasn’t caused by global pandemic. It was caused by policy, and that could be fixed with a tweet. And that’s what I said. And then, you know, two days later, it did get fixed with a tweet, the market obviously ripped higher, and it hasn’t looked back since. And we’ve been pretty much bullish the entire way up now. We were expecting some kind of pullbacks along the way. We weren’t expecting this kind of, you know, vertical ascent, because you haven’t had even a 3% pullback from Close to close on the S and P during this whole move up, which since April. And so that’s been pretty incredible. That was the last time you saw it. So we remain bullish. Money supply, the Fed, this market’s been addicted to easy money, really, since covid, and you could argue, since Lehman Brothers failed and so that, I think, is the number one driver of stocks in the near term.
Caleb Silver
Yeah, well, obviously there’s been a lot of questions about the Super scalers and how much money is being spent on AI. But yet, we have productivity gains and we have robust corporate profits, especially from the biggest companies in the stock market right now. When you have this recipe that I was talking about earlier. You got strong corporate profits, you got rates that are heading down and to the right. You got easy regulation, lower corporate tax rates. This is an environment for doing business, for printing money, and the government investing billions of dollars in public companies too. What could go wrong?
Dan Niles
Dan, there’s so much that’s going to go wrong. I think the main thing that’s going to go wrong is, and just to be clear, I think the stock market heads to New all time record highs keeps going. It’s this slow melt up I’ve been really talking about since July, and I think, you know, that’s going to be driven by another two rate cuts before the end of the year. But I think there’s a couple of things that I’m looking at. One is, do we get to Thanksgiving? And our sales during the holidays less than we thought? Because there’s been a pull forward in demand. If you look at imports in Q1 within U.S. GDP, they were 38% year over year, because people were worried about the tariffs, and we all heard about Apple’s airlifting 600 tons of iPhones to get in front of the tariffs, and then Consumers also buying in advance. So you give some of that back in that the holidays, if you already bought a car or PC or smartphone, you’re not going to buy one. The good news is in Q2, imports went down 30% so you probably have some more to burn through. We’ll see.
Dan Niles
Maybe that happens in Q3 and we’re good in Q4 because the stock market’s at record highs, as you talked about. And you know, interest rates are lower, and consumers just kind of keep spending through that. But the bigger issue when I look out to 2026 is over the past three years, ending this year, since chatgpt got introduced, you will have spent by just the five biggest companies out there. So the three hyperscalers, Amazon, Google, Microsoft, plus Oracle and meta, you will have spent $825 billion over three years. The industry as a whole will have spent $1.2 trillion in capex. And are you getting any return from that? Well, you had the study from MIT that said 95% of corporations investing in AI are seeing 0% returns. And from a more practical standpoint, if you look at the stock market, Salesforce, which is kind of the poster child for a agentic AI, right? Talking about, you’re gonna have all these agents out there. The stock was at a all time record high in late 2024 in August, it hit a 52 week low. And so you’re seeing more and more things, whether it’s Sam Altman, the CEO of open AI, saying, Hey, we’re in an AI bubble. And if you look at the history of tech, you’re not going to have 10 companies winning in AI, but you’ve got a ton of companies investing in AI, and not all of them are going to win. And there is going to be a shakeout if you’re not getting the ROI, especially if you don’t have the cash flow. And we can get into you know which ones I think are winners, but I think you’re going to see names like Nvidia next year, you know, go down 30% plus at some point after hitting new all time record highs, you know, later this year, I think you’re going to go through the shake out period next year, as the market just won’t fund all of these private companies that are losing, you know, hundreds of billions of dollars.
Caleb Silver
Well, I started following your research back in the internet days and the internet bubble days when you were Lehman Brothers, and I learned so much from you. Continue to learn so much from you. Any connection, any is there any way to look at these two periods and say this is similar to that, but there’s a fundamental difference. You were an early cover of companies like Cisco that were building out internet 1.0 what does it look like? And when you look at this period versus 1999.
Dan Niles
Yeah, there’s so many similarities, and there are differences, as you pointed out. So the positive difference is that the biggest spenders are all have huge cash flow streams from other businesses to fund their expansion into the internet. So if you look at Amazon, they got e- commerce funding the build out. If you’ve got Google, you’ve got search funding the build out, right? If you got Microsoft, you got that massive office franchise funding this build out. So they’ve got huge cash flow streams coming in—meta, similarly with their social media presence, so that supports their spending for as long as they think they’re getting a return on that spending.
Unlike back in the internet bubble, where it was a lot of these money losing companies, including names like Amazon, right that we’re losing a lot of money to start with, and they were the one of the good ones that survived right didn’t stop the stock from going down 95% from peak to trough, but they did survive it, and obviously have done great ever since. While a lot of the other competitors, you know, web van or pets.com where you pick your favorite name, obviously, all went out of business. So I think cash flows from the biggest vendors is the big positive. But having said that, you’ve also got a lot of very large companies all spending a lot of money. And so if you think about the tech industry, it normally coalesces down to about two or three big winners, if you think of the spaces we have right now, and e-commerce is really Amazon, you know, there’s not really a good, strong number two, if you think about search, it’s really Google. There’s not a big, strong. Number two, think of cell phones, right? It’s Apple. Like, is there another strong player in the US? Obviously, overseas, there’s, there’s some, but that’s what you typically see in the US right now for AI, what do you have? You’ve got, you know, a whole bunch of names, Amazon, Google, Microsoft. You got anthropic OpenAi, you know, so perplexity. And then you have all these companies overseas, but ultimately, I think you’re going to see the same thing where it gets down to two or three guys, and the ones that it should win are the ones with the access to the most free data.
So who are those? Well, Google’s got YouTube and ultimately producing video that’s going to be the killer app for this stuff. And they have Veo 3, which only produces about eight seconds of video today, but that’s the worst it’s ever going to be. And actually, Gemini got to number one on the App Store, passing OpenAI about, you know, week ago Friday, and that was driven by Nano Banana, which you may have heard of, rights, the image editing, editing app. And so I think they’re going to be one of the big winners. And consumer meta obviously has all that free data they can train on from Instagram and Facebook that comes in. So they’re going to do well, tick tock, obviously, also on the consumer side, and then on the corporate side. Every you know, 60% plus of companies have Oracle databases, so they should be in good shape. And then Microsoft, obviously, everybody’s got Microsoft Office. But beyond that, even names like open AI, you go, well, they don’t have any free data to train on. They’re losing a ton of money. And the latest projection from open AI was, hey, our revenues are going to be 26 billion higher than we thought in fiscal 30, but we’re going to have to burn an extra $80 billion to generate that revenue. And ChatGPT 5 wasn’t that great, right? A lot of people went back to using ChatGPT 4, and even in metas case, they restructured their AI team like four times this year already, after really being the one that’s used it the best to run their business. So there’s a lot of red flags starting to show up. But with the Fed cutting, I think these stocks go to all time record highs, including Nvidia. But I think as you get into next year, you’re going to start to see some shakeout, and we’ll see how these companies guide to capex when they report the September quarters. I don’t I’m not sure that any of them are going to raise their capex guidance, where they’ve all been raising pretty consistently now for the last three years or so, with, you know, a bit of a pause middle of last year.
Caleb Silver
Yeah. How much can you spend? And I guess lower rates frees up some cash for them to spend a little bit more money. You talked about a potential melt up until Thanksgiving, not to be a turkey this close to Thanksgiving, but you’re right. We do pull a lot of sales forward. We’ve done it in years past, too on the consumer side, but on the business side as well. You also talked about valuations. You talked about some of these big, mega giants hitting record highs again. Valuations matter, but they don’t matter in a time where things are melting up.
Dan Niles
Why 100% because it’s it’s human nature, right? Everybody, whether it’s consumer retail investors or professional money managers, are driven by fear and greed. In April, early April, it was fear, and now it’s greed. And as you brought up before, you’ve got 7.3 trillion sitting in money market funds. But here’s the interesting part, that’s up 16% year over year. And if you go back and you look at money market funds during prior periods, those were actually going down until the very, very end, when they started to go back up again. You know, you go back into the early, you know, coming out of the tech meltdown all the way to the housing bubble. You know, you can look at those charts. So this is very unusual to be having money market funds going vertical at the same time stocks are going vertical.
And as you head towards your end, people are just going to get greedy and professional money managers are a lot of them are suffering from performance anxiety, because unless you are negative coming into the year, like we were, and then actually started to hold your nose and buy stuff in early April, you’re probably massively underperforming this year, and so you’re trying to play catch up. And that, in and of itself, you hear a good story, especially if it’s a big story. You’re seeing that with Apple right now, right where, you know, for some reason, iPhone 17 look like they’re selling really well. And despite the fact you’re going to get much better phones next year, and you’re seeing Apple really today, I think I saw was another two and a half percent or so you’re starting to see that really play catch up, because the stock is essentially flat for the year. And so if you’re a professional money manager, like, oh my god, maybe I can catch up to my indexes. If I put more money into this thing, because it’s big, it’s liquid, I can put a lot of capital to work. And consumers, hey, I got an iPhone in my pocket. Sounds like they’re selling. Well, why don’t I buy that too? And so it’s really the greed part that kicks in. And so that’s why the phrase the market can stay irrational longer than you can stay solvent, right? John Maynard Keen said that, I think you’re going to see some of that before year end. Yeah.
Caleb Silver
Great point. I’ve been obsessed with this metric that I keep hearing over and over and over again from professional money managers and smart analysts, and it’s this revenue per employee, right? This fact that the biggest companies and Nvidia is the top of the top of the heap there, $3 million per employee. This productivity gain that these productivity gains that these companies are getting with less workers, is kind of the metric that a lot of people are focused on, is that something you’re looking at. What are the most important metrics? I know valuations don’t matter in a melt up, but I know you actually look through channels, and you look at individual things, metrics that tell you the health of the spend on this part of the economy, but also the general health of tech. Is it rev, employee per employee, if not, what is it?
Dan Niles
So let’s look at Nvidia’s last quarter. So here are the some of the metrics. If you remember, in April, Nvidia had this massive write down for $4 billion and usually with semiconductor companies, when they have these massive write downs, at least for the next six months, things look will look good. Because, you know, the CFO of Nvidia is very, very smart, right? They’re going to throw as much junk into the write down as they can so that that then, at least for the next six months, things will look okay because you’ve written off everything that was potentially a problem. So that’s the first thing. But when they reported the their most recent July quarter, they missed Wall Street’s forecast for data center revenues, not by much, by only a percent, but they actually missed it. Second thing is, if you look at the inventory on the balance sheet, especially finished goods, you go that’s been going up by about two or 300 million sequentially a quarter for the last several quarters. Last quarter, it went up $5.2 billion you look at accounts receivable, it went up more than normal, seasonally, sequentially. So that means they did a lot of business at the end of the quarter, and they still missed the data center revenue numbers. And the final thing that bothers me, and this is something that happened in the late 1990s is in the late 1990s you may remember Alcatel, Lucent, Nortel, all these companies were doing vendor financing, where they were basically saying, Hey, you come buy my product, and I’ll actually finance that for you, right? Which is a very incestuous relationship, because then that counts as revenues for for the com those big companies. Well, you’re seeing that with data centers now, right where Nvidia is an owner of core weave, and they’re striking these big deals with core weave, where the most recent one it was, I think, over $5 billion but any unused GPU capacity and video will take and use it for themselves and buy back from them, essentially. So you’re seeing this kind of stuff, which, you know, they’re not calling it vendor financing, but that’s essentially what it is starting to pop up. If you’re a bull, you say,
Well, that’s because there’s so much demand, and it’s just all going to get absorbed, but at the end of the day, you need usage at the end customer level to offset all this money or spending, and the fact that costs are dropping dramatically on these AI products and now The training benefits are starting to level off. The positive, obviously, is that, you know, inference, demand is taking off, and so that’s good, like, I use Gemini all the time for my job. In fact, I’m not hiring somebody because I’m getting so much productivity off of this thing that I just don’t need it, and it’s much faster, it’s it’s terrific. And so that’s the positive part of it. But the question is, can that offset the fact that costs are dropping by like 90% with which, with a lot of the improvements, which we go back to the internet period, it’s the same, similar thing, right? It’s not like the Internet didn’t grow in 2001 and 2002 internet traffic doubled each of those years, but NASDAQ went down 78% from peak to trough, and that’s because valuations had gotten stratospheric in the late 90s, when the Fed was also pumping money into the market because they were afraid of the Y2K bug, and then when they started taking it out, and you had rationalization of all this spend and vendor financing dried up. You had this big ShakeOut. And so I don’t know if it’s the shakeout next year. I don’t think so, but I think you’re going to have a bit of a shakeout next year, as not everybody can keep spending at these rates if you don’t have the cash flow to support
Caleb Silver
Yeah, great point. Next sectors for AI. We know this is the big build out of obviously, chat GPT is now a couple of years old, but it feels like there’s consumer AI happening all around us. There’s AI happening across industries here. But what sectors has it not touched, or what sectors have investors not woken up to the fact that it’s going to be massively disruptive and very profitable?
Dan Niles
I think investors have woken up to this. And so it’s not going to be a surprise. I think the one thing that could be interesting, and how, again, you have to ignore valuations, which I hate doing, because I at heart, I may, you know, growth at a reasonable price investor, but like, if you look at Apple, you go, they’ve been horrible in AI, right? You. But next year, you’re not only going to get Apple intelligence, where they’ll probably end up working with Google’s my guess, now that the anti trust remedies have come out for Google, right, where they can pretty much do what they want. And so you’re going to get a phone that has AI capabilities on it, and you’re probably going to get a foldable phone right, which has been selling incredibly well for several years in Asia, because Samsung has been a leader in that. In fact, Samsung has a tri fold phone out now, and so I think you’re going to see a pretty good upgrade on that, because let’s face it, that’s the device we all have with us, is our smartphones. And right now, if you have an iPhone, which the majority of the US population does is not that useful. And so when you get all of that and you can stick it in your pocket, that’s going to be absolutely incredible. And so, you know, you look at Apple and you say, gee, you know, it’s trading at a 34 times PE and the markets at 25 times. Like, what do you want to pay for this. But as we talked about earlier, you get some momentum. Stocks underperformed like that. Might be on a relative basis, do better, because unlike everybody else that spent hundreds of billions of dollars over the last three years, Apple’s nowhere in AI and so they might be the dark horse that does well next year, because, just because they’ve been so bad the past three
Caleb Silver
Yeah, plenty of cash on hand as well. Dan knows I’ve learned so much from you over the years. I continue to learn folks follow Dan at Daniel T Niles on X, also his LinkedIn page, also Niles investment management. So much good stuff there. Thank you so much for joining the Express. Have a great week.
Dan Niles
Thanks a lot, Caleb.
Caleb Silver
Great comments here, flowing in from our listeners around the world. The.com era was focused on the world changing digitally. Says jujila AI and public companies are focused on digital and physical change of the world. Great point. Dan was making a similar point to that as well. Big changes here. Joel Daniels Shahi saying, I think energy grid sector stocks are going to boom in the upcoming months. I think they’re booming. If you look at the nuclear sector especially, had a huge week last week. We’ve seen energy stocks rally along with AI stocks. There is an AI shake up coming. That’s what Dan is saying. And every boom has its Shakedown and shake up. Great point there. Join the conversation. We’d love to hear from you, our listeners, viewers and fans from around the world, following the Express. We love it. All right. Let’s get to some money in motion, because money is moving, especially in the final.
Money is moving, my friends, as we said, markets kind of near record highs right now, dancing around record highs, pretty much across the boards. Little sell off to start the week. This morning, concerns about those $100,000 HB one visas that the administration is now going to charge companies around the US. No problem for the big tech companies. Big problem for small companies, if they’re having to pay $100,000 to bring their HB one workers in but the money in motion has been really strong, especially in the final hour of trading. Our good friends at sentiment trader had with some smart research this week about the final hour of trading. Now I spent a lot of time down into the New York Stock Exchange, pretty mellow place, except for the open and the close, but in the final hour of trading, according to sentiment trader, that’s when we’ve seen a big surge in stock prices and then the overall market. And when you see a surge in the final hour trading, it tells you two things, traders have a lot of confidence, right? They’re feeling pretty strong, feeling pretty bullish, and you usually see a follow through of that for the following days and really for the rest of the year. So when you get good, strong trading, positive trading in the final hour of trading usually means good things are coming to the markets. We’ll see how long that lasts and how that long that final hour remains as strong as it does, all right, let’s get set up for another busy week ahead. Man, we are in the fall and things are moving. Let’s get set up for the week ahead.
Yeah, big week for fed speakers, after that quarter point rate cut last week, and almost all of them are on tour speaking at one economic gathering or the other. So we’re going to hear from Fed speakers, fed governors, fed presidents, all week long. They’re all on tour talking this week. Tuesday, we’re going to get an S and P flash us Purchasing Managers Index report for the month of September. How are things going among purchasing managers? Powell is on the Hill talking again, along with some other fed speakers as well, earnings coming in from micron and Autozone on Wednesday.
New home sales for the month of August. Not a lot of homes are selling, but as rates come down a little bit, we’re starting to see a little activity in the housing market. Mary do. Daily of the San Francisco federally speaking, will get more earnings Cintas and several other companies, including Thor industries and KB homes on Thursday, massive day for government reports, second revision to the second quarter. GDP coming out existing home sales for August. Initial weekly jobless claims again. We don’t always pay attention to that, but they’ve been climbing lately, which is telling us that the unemployment rate may be rising again, may cause the Fed to cut again when it meets next in November, durable goods orders for the month of August, also this weekend, on Friday, the PCE, the Fed’s preferred inflation gage that comes out on Friday. We know that CPI is around 2.9% we’ll see what PCE is. A little more dynamic pricing there, and then consumer sentiment for the month of September. All right, let’s get on with the indicator of the week. And I’ve been watching a few things this week, including, lately, buybacks, stock buybacks. This is supposed to be a banner year for stock buybacks, over a trillion dollars to be spent by companies buying back their own shares. Second quarter, they dropped back a little bit in terms of their buying. Great chart here by the folks at Bespoke on the difference between dividends and buybacks. These are two ways that companies reward shareholders like us for owning their shares, dividends, that little bonus check we get every quarter for owning the stock, and buybacks, which take shares off the table and increase the price to earnings ratio.
But did you know? And I didn’t know this. I wasn’t paying attention to it for a while. Companies do get taxed on stock buybacks, and maybe that’s why they chill that out a little bit in the second quarter. Or maybe they were just worried that the stock market was going to sell off after all, after all those concerns about tariffs, but buybacks are back on the rise. According to S P Global indices here, Qt, second quarter share repurchases, 234 point 6 billion, that was down 20% but they’re coming back. Buyback concentration, though, is increasing, with the 20 top S&P 500 companies accounting for 51% of the second quarter buybacks. Who are the biggest buyback kings out there? The biggest stocks in the world, some of your favorite stocks according to our investor sentiment survey, that includes apple, the biggest of all the buyback kings, meta alphabet, JPMorgan, Chase and video and Bank of America. Hey, you go down the list of the top 10 stocks owned by readers and listeners of Investopedia and the Investopedia Express. That’s the top six right there. You love those stocks that pay big dividends and buy back their shares. You know who’s a big buyback fan? Warren Buffett. You have nothing better to do with your cash. Buy back your shares, reduce that share count, increases price to earnings ratio. Maybe put that work money to work in other places, but buybacks that been a big propellant of the market at record highs, and so have dividends, and that is an indicator we will be keeping a close eye on.
Thanks so much for joining us this week, as always, to all of our folks around the world. Dan Niles, from Niles investment management folks, if you’re not following Dan Niles, you’ve got to follow him on X and on LinkedIn, wherever you get your social news. Dan’s one of the smartest tech investors out there. I’ve learned a ton from him over the years. Make sure you’re following him. And you know the Investopedia Express is on demand as a podcast. Right when we clear live here, we go up live on all podcast platforms every week, every one of them. So tune in to the Investopedia Express if you missed this live or find us here every Monday, live and direct and thank you for joining us here on the Express. Have a great week, and we’ll talk again a little further on down the line.
