Yahoo Finance's Julie Hyman and Brian Sozzi discuss the $235.6 billion in S&P 500 buybacks in the third quarter, led by Big Tech companies like Apple, Meta, and Google.

Video Transcript

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JULIE HYMAN: The record number of stock buybacks this year-- the record amount, I should say-- definitely one of the things that helped underpin the stock market. Ryan says he doesn't like it though. Soz, would you rather they-- what would-- what do you want them to spend their money on?

BRIAN SOZZI: Well, I can't give everything away right now, Julie. Let me run through the stats first, geez, and let's-- some new data out of S&P that tracks this very closely. I have to give my man Howard Silverblatt a shout out. This guy is an institution on Wall Street. And his data never disappoints.

Stock buybacks or share repurchases-- whatever you like to call them, you say tomato, I say tomato-- in the third quarter, they were up 18% over the previous quarter here. So a big quarter for stock buybacks.

The top-- the top 20 largest issues or companies accounted for 53.8% of those third quarter buybacks-- talking about Apple, Facebook/Meta. Or they were, of course, both big buyers of their stock as was Google.

And really, for the 12-month period through September, we've seen companies repurchased $742.2 billion worth of their stock up 21.8% year over year. So again, you see those companies right there-- those top five companies repurchasing a large amounts of their stock.

And even further down the list, you had the likes of Visa and Mastercard as well repurchasing large amounts of their shares. But Julie, to your point, I have historically not been a fan of stock buybacks.

I would much rather see companies pour their resources back-- pour back into capital expenditures-- make those longer term bets instead of trying to pop up their stock price and boost the big fat wallets of their executive team. Which in many cases, their compensation programs are tied to earnings-per-share targets.

JULIE HYMAN: Well, I guess the question is, are they doing both? I mean, what do we know thus far about CapEx this year? And you know, because if they have a lot of cash on their balance sheets-- which I believe they do as well-- are they deploying it in-- you know, is it sort of a multifaceted approach? I-- I think that your-- your argument makes sense if they are doing one at the expense of another, right?

BRIAN SOZZI: Yeah, CapEx, I would say, is not growing at the same pace as stock buybacks. Stock buybacks or just easier compared to, let's say, if you are a tech company to go out there and spend a couple of billion dollars and commit to a new plant out there in Arizona or in the desert somewhere.

But you know, I still would rather see companies invest more in their people, more in plants, more in machines, more in digitization. Because the world-- as we continue to learn here during the pandemic-- is ever changing. And you have to be positioned correctly.

JULIE HYMAN: Yeah, most definitely so.