Do Share Buybacks Create Real Value? Apple and Microsoft Compared

Share buybacks can raise demand for a company’s shares, reduce the number of shares in circulation and potentially boost earnings per share. But do they create real long-term value, or do they mainly lift market valuation without improving the underlying business? Using Apple and Microsoft as examples, I argue that a company’s real strength should be measured primarily by revenue growth, productivity and its ability to reward shareholders over time. A higher market capitalisation alone may not reflect stronger business performance. In my view, companies should be cautious about using large portions of profit for share repurchases. Investors should also consider dividends, revenue and long-term competitiveness rather than relying only on share-price growth.

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