What Happened?
Shares of digital engineering services company EPAM Systems (NYSE: EPAM) jumped 8% in the afternoon session after the company announced a new stock repurchase program of up to $1 billion.
The company's Board of Directors authorized the program, which will have a term of 24 months. Stock buybacks are often viewed positively by investors because they reduce the number of shares outstanding, which can increase earnings per share. This move signaled management's confidence in the company's financial health and future prospects. The company’s CFO, Jason Peterson, added that they “remain confident in the underlying strength of our business reflected by three quarters of improving year-over-year organic constant currency revenue growth.” The repurchases may occur through open market or private transactions.
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What Is The Market Telling Us
EPAM’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock dropped 4.1% on the news that worries over worsening trade relations with China were triggered by critical comments from President Donald Trump. Trump targeted China's tightening controls on rare earth metals, which are vital components in many technology products from electric vehicles to defense systems. The president's tone and the suggestion of canceling a meeting with President Xi caused a rapid sell-off in the market.
Earlier in the week, China announced new export controls on the critical minerals. Beijing's Commerce Ministry stated that foreign suppliers now need government approval to export products containing certain rare-earth materials. These materials are essential for producing high-tech goods, including computer chips, electric vehicles, and defense technology. Analysts viewed the move as a strategic assertion of China's dominance in the global rare earth supply chain, particularly amid ongoing trade tensions and ahead of an anticipated meeting between the US and Chinese presidents.
Consequently, technology stocks with significant exposure to Chinese supply chains, such as Nvidia and AMD, experienced sharp declines. This downturn was exacerbated by the bearish sentiment surrounding a prolonged U.S. government shutdown, adding to overall market uncertainty.
EPAM is down 32.1% since the beginning of the year, and at $155.64 per share, it is trading 41.8% below its 52-week high of $267.63 from February 2025. Investors who bought $1,000 worth of EPAM’s shares 5 years ago would now be looking at an investment worth $448.07.
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