Goldman Sachs sees $1.7 trillion in buybacks offsetting stock supply

what happened

According to Newsmetry API, citing Goldman Sachs, US companies could return a record $1.7 trillion to shareholders through stock repurchases in 2027. The brokerage says that may soften the effect of a near-record expansion in the supply of shares on market valuations. It expects the amount of publicly traded stock to rise sharply next year.

An increase in share supply usually creates pressure on prices, but Goldman Sachs believes buybacks, combined with strong demand from households and overseas investors, can absorb the additional stock. “We expect corporate equity issuance will total $600 billion in 2027,” Ben Snider, a portfolio strategist at Goldman Sachs, wrote in a note dated 9 October. He pointed to solid economic growth, higher share prices, lower interest rates and ongoing investment tied to artificial intelligence.

The brokerage estimates that equity issuance has amounted to roughly $431 billion this year, representing a 98% increase from the prior year. It is on course to exceed the former annual record of $540 billion, set in 2021. Goldman estimates that AI-related follow-on offerings contributed about $65 billion, or 45% of total US issuance. It also expects net public equity supply in 2027, including shares becoming available after post-IPO lockup expirations, to post its biggest increase since 2000.

why it matters

For markets, the projection suggests that a major increase in equity supply could be largely balanced by corporate repurchases and investor demand, helping preserve the relationship between available shares and incoming capital.

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