Trump: Stock Buybacks Are a Fake Way to Raise a Price

President Donald Trump is back on the buyback warpath, calling share repurchases a fake way to lift stock prices. The comments land squarely on defense contractors, an area where the administration has already taken executive action.

What Trump said

Trump has again branded stock buybacks a fake way to lift share prices, reviving a theme he has hit on repeatedly this year.

His argument is direct: repurchases inflate share prices without building real capacity, so he wants the money spent on plants, equipment, and faster output.

Defense contractors in the crosshairs

The policy targets large contractors such as Lockheed Martin, Northrop Grumman, and RTX. Trump has returned to the theme this week, and his buyback comments have rattled defense stocks before.

This is not new posture. On 7 January 2025, President Trump issued an executive order aimed at limiting and preventing certain large defense contractors from conducting stock buybacks, issuing dividends, and awarding executive compensation.

The administration’s frustration is well documented. Senior officials have raised concerns that defense contractors are using federal funds to purchase shares of their own company’s stock rather than investing in research and development or improving production and supply chain capabilities.

Do you want to see how to make more plays? Do you want to find gains yourself?

Unusual Whales helps you find market opportunities through our market tide, historical options flow, GEX, and much, much more.

Create a free account here to start conquering the market with Unusual Whales.

The buyback debate in Washington

Buybacks have become a recurring political target on both sides of the aisle. A new analysis estimated that major companies have spent nearly $5 trillion on share repurchases since President Donald Trump’s 2017 tax cuts took effect.

Just 10 companies — Apple, Alphabet, Microsoft, Meta, Bank of America, JPMorgan Chase, Wells Fargo, Oracle, Nvidia, and Visa — were responsible for more than $2 trillion of the $4.8 trillion in total buybacks since 2017. Senate Democrats have also introduced legislation to hike the existing buyback excise tax from 1% to 4%.

The alt-playbook: dilution instead of repurchase

Not every company plays the buyback game. MicroStrategy (now Strategy) takes the opposite path. It does not repurchase common stock. It sells new shares and preferred stock, then spends the cash on Bitcoin. That dilution and debt approach has built a stockpile of more than 845,000 Bitcoin, the largest held by any public company.

The contrast frames the broader question for investors: is a stock moving because the business is growing, or because the share count is shrinking?

Options market and stocks to watch

Watch for headline-driven moves and options flow in the names most exposed to renewed buyback rhetoric:

LMT — Lockheed Martin sits at the center of the defense buyback debate. Watch for premium repricing if restrictions are enforced or expanded.

NOC — Northrop Grumman is similarly exposed. Watch for skew in defensive put hedging.

RTX — RTX has been named directly. Watch for flow around capital return policy commentary.

MSTR — Strategy is the inverse trade: a dilution model rather than a buyback model. Watch for sensitivity to Bitcoin price and premium-to-NAV.

AAPL — Apple is the single largest buyback story of the past decade. Watch for any read-through if buyback tax proposals gain traction.

For more, see other news on Unusual Whales.

Want more market intelligence? Create your free Unusual Whales account for options flow, market tide, GEX, and the full toolkit.