This chart shows the impact of EPS (Earnings Per Share). Share buybacks are helping companies like Apple, Microsoft, and Google boost their earnings per share by reducing the number of shares outstanding. This makes their profits look stronger, even when the broader economy and most other companies are struggling.
This chart shows the Earnings Per Share (EPS) of the S&P 500 from 2016 to 2025, comparing two scenarios: with and without buybacks.
The blue line represents S&P 500 EPS with buybacks, showing a general upward trend from around $100 in 2016 to over $200 in 2025, with fluctuations, notably a peak around 2021 and a dip in 2020.
The orange line represents S&P 500 EPS without buybacks, starting at a similar level to the blue line in 2016 but remaining relatively flat or declining slightly over time, ending below $60 in 2025.
The key difference is that buybacks (stock repurchasing by companies) significantly boost EPS, while excluding them shows a much flatter or declining EPS trend, highlighting the impact of buybacks on reported earnings.
