Bank of America announced a $40 billion stock buyback starting August 1

Bank of America is throwing serious cash at its stock. The firm just launched a $40 billion buyback program, lighting a fuse under its shares, which jumped 1% in late New York trading on Wednesday.

The board gave the green light for the new plan to start right after August 1, once the current repurchase scheme wraps up. That older one, set at $25 billion last year, had $9.1 billion left in capacity by the end of June.

This new move scraps that old plan and goes bigger. The company said the buyback gives them “additional capital return flexibility.” Translation? They’ve got more cash than they need and are pumping it back into their stock.

The official line: it’s about balancing support for economic growth, future investments, and shareholder returns without losing financial strength. Sounds nice on paper, but the real story is they’re piling money into shares while still sitting on solid earnings.

Bank of America falls short on revenue but beats profit forecast

Alongside the buyback announcement, Bank of America reported its second quarter earnings. It was a mixed bag. The bank posted 89 cents per share, beating the 86 cents expected by analysts at LSEG. But the total revenue of $26.61 billion missed the $26.72 billion that was forecast.

The miss was mostly thanks to net interest income (NII), which came in at $14.82 billion, about $70 million short of what StreetAccount had projected.

NII is what the bank earns from loans and investments minus what it pays depositors. It still rose 7% year-over-year, but lower interest rates took a bite out of what could’ve been stronger growth. Despite that, the bank still grew its profit to $7.12 billion, which was up 3% from the same period last year.

CEO Brian Moynihan tried to steer attention toward longer-term trends. “Consumers remained resilient, with healthy spending and asset quality, and commercial borrower utilization rates rose,” he said.

According to him, NII has now risen for four straight quarters, thanks to stronger deposit inflows and loan expansion. Basically, the core business is humming even if some numbers disappointed Wall Street.

Trading beats fixed income targets while banking fees decline

Even with revenue falling short, some divisions pulled their weight. Fixed income trading pulled in $3.25 billion, beating the $3.14 billion estimate. Equities trading, on the other hand, landed at $2.13 billion, which was just below projections.

Over in investment banking, things looked weaker. Fees dropped 9% year-over-year to $1.4 billion. That said, it still came in above the $1.27 billion StreetAccount forecast, so it’s not a complete flop. Still, that 9% dip shows the headwinds banks are facing in the dealmaking space this year.

All this is happening while Bank of America stock has already climbed about 10% in 2025 so far. This buyback adds more fuel. The company isn’t alone either. Other major players are doing the same.

JPMorgan Chase approved a massive $50 billion repurchase, and Morgan Stanley reauthorized its multiyear plan worth up to $20 billion. All of them passed the Federal Reserve’s stress test recently, so now they’re flaunting their capital positions.

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