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Interestingly, this cash reserve remains substantial even after Gilead’s recent stock buyback program, where the company repurchased $8 billion worth of its shares last quarter. Harjes noted that the buyback occurred at an average price of $92.09 per share, equating to around 7.6 times the company's earnings for 2016.
This aggressive buyback strategy implies that Gilead's management perceives their stock to be undervalued, favoring internal investments over potential acquisitions at inflated prices. As Campbell pointed out, the company’s belief in its current market position is strong, which may account for the absence of any major acquisitions.