Buyback Boom: 3 Companies Betting Big on Themselves

Key Points

• Buybacks are on the rise for three key firms, which have just added a combined $4 billion in capacity.
• Lockheed Martin and Elastic have underperformed in 2025; management may be looking to take advantage of this through repurchases.
• Meanwhile, AutoZone is surging. Management may be anticipating that this will continue.

Three key names are jumping on the repurchase train after a relatively quiet two weeks for buyback announcements. Buybacks provide multiple bullish signs to investors. Buybacks require significant outlays of cash. Thus, companies must feel relatively confident in their ability to generate cash in the future to undertake them.

They may also signal that a company sees its share price as undervalued. By repurchasing its own stock, a company is essentially investing in itself. It makes sense for them to do this when they have a reason to believe their share price will appreciate.

Buybacks also lower a company’s outstanding share count, providing a tailwind to metrics like earnings per share (EPS). Below, we’ll dive into three firms that just made notable buyback announcements, sending bullish signals to investors.

Lockheed Martin Boosts Buyback Coffers by $2 Billion as Shares Underperform

First up is a titan of the defense industry, Lockheed Martin NYSE: LMT. On Oct. 9, Lockheed announced that it had added $2 billion to its share buyback capacity. This brings the firm’s overall buyback authorization to $9.1 billion, equal to a very substantial 7.7% of the firm’s approximately $118 billion market capitalization. This gives Lockheed a significant ability to lower its share count going forward.

Lockheed shares have provided a modest return of 6% in 2025. Although this is not terrible, it starkly contrasts the whopping 43% return of the iShares U.S. Aerospace & Defense ETF BATS: ITA. Given the steep underperformance of its shares in 2025, the company may believe that markets are underappreciating it, leading to its buyback boost.

Over the last 12 months, the firm has spent around $3 billion on buybacks. This suggests it could use its full capacity over the next three years to buoy its share price. Notably, shares are down by around 16% from their all-time high, despite the U.S. government dramatically lifting defense spending.

Elastic Announces First Buyback Plan

Next up is a mid-cap company growing its business through generative artificial intelligence (AI), Elastic NYSE: ESTC. Their tools allow customers to search, understand, and secure their data, with AI helping power these capabilities. Despite growing their revenues by 20% last quarter, Elastic’s fastest clip in nearly three years, shares are down around 13% in 2025.

On Oct. 9, the company announced a new $500 million share buyback program, which is equal to 5.4% of its approximately $9.2 billion market capitalization.

Importantly, this marks Elastic’s first-ever buyback authorization, driven by the company’s recent ability to generate substantial and consistent cash flows. Over the last 12 months, Elastic’s free cash flow has come in at $314 million. That’s nearly double the $160 million it generated over the same period a year ago.

The company plans to spend more than half of its authorization in its current fiscal year 2026. It also expects to spend 50% of its free cash flow on repurchases afterward. This will go to partially offset shareholder dilution, as Elastic spends significantly on share-based compensation. Still, less dilution going forward is a win for shareholders.

AutoZone Lifts Buyback Capacity to Over $2 Billion After Strong 2025 Gains

Finally, retail auto parts giant AutoZone NYSE: AZO is also significantly expanding its buyback capacity. On Oct. 8, the firm announced a $1.5 billion increase to its share buyback authorization. As of last quarter, the company has $632 million left in its buyback authorization, bringing its total buyback capacity to approximately $2.13 billion. This amount represents about 3.1% of AutoZone’s $68 billion market capitalization.

AutoZone has been a strong performer in 2025, up approximately 27% on the year. The stock is down only around 6% from its all-time high, reached in September. Thus, the firm’s buyback authorization suggests that it may see room for its strong rally to continue after dipping.

Over the last 12 months, AutoZone spent around $1.8 billion on buybacks. This indicates that the firm could use its newfound capacity relatively quickly to continue lowering its share count. Over the past 10 years, AutoZone has lowered its outstanding share count by around 46%.

Buybacks: Positive Signals, But Not Crystal Balls

Overall, LMT, ESTC, and AZO are all sending encouraging signals to investors through their buyback increases. Still, it is important to remember that buybacks are just one of many key data points to consider when making investment decisions.