Buybacks Galore: 3 Mega-Caps Just Approved Billions in Buybacks

Core Insights - Three mega-cap companies have announced significant share repurchase authorizations, indicating a strong commitment to returning capital to shareholders and potentially boosting share prices [1] Group 1: Merck & Co., Inc. - Merck has a market capitalization of $210 billion and recently authorized an additional $10 billion buyback program, raising its total buyback capacity to $12 billion, which is approximately 5.7% of its market cap [2] - Keytruda sales grew by 21% last quarter, while Gardasil/Gardasil 9 sales declined by 18% due to lower demand in China, highlighting the need for new blockbuster drugs [3] - The company projects over $50 billion in sales potential for drugs in its pipeline, contingent on regulatory approvals and successful rollouts [3] Group 2: ServiceNow - ServiceNow has announced a buyback authorization of $3 billion, bringing its total buyback capacity to nearly $3.3 billion, which is 1.6% of its market cap [4] - Subscription revenue increased by 21% last quarter, with remaining performance obligations rising by 26%, indicating strong future revenue potential [4] - The company's AI tools are a significant growth driver, with a 150% increase in customer deals for its "AI-fueled" Pro Plus subscription in one quarter [5] Group 3: Cisco Systems - Cisco announced a $15 billion buyback authorization, increasing its total buyback capacity to $17 billion, which is 6.6% of its market cap of $258 billion [7] - The company raised its quarterly dividend by $0.01 to $0.41 per share, marking its 14th consecutive annual dividend increase, with a current yield of 2.5% [7] - Demand for AI infrastructure solutions is increasing, with orders reaching $350 million, and the company expects AI infrastructure orders to exceed $1 billion in fiscal 2025 [8]