Apple Inc.’s intention to repurchase $100 billion worth of shares appears to be a futile attempt to increase its stock price.
The company’s (AAPL) high bar, which was established last year when it smashed corporate records with a stunning $110 billion repurchase strategy, was not met by the share repurchase plan unveiled Thursday along with strong profits.
Early Friday trading saw a more than 4% decline in Apple shares.
However, Apple continues to dominate stock repurchases even with a lower buyback volume. The tech giant owns the top seven positions in a list published by Birinyi Associates that goes back more than a dozen years, with its May 2024 announcement being the highest ever made by any U.S. company:
Like other businesses, Apple occasionally distributes surplus funds to shareholders in the form of dividends and buybacks to increase long-term returns for stockholders.
According to Angelo Zino, senior equities analyst at CFRA Research, “for them, it’s better than sitting with cash on hand or doing M&A as it could lead to inferior returns (not to mention Apple is likely unable to do any significant M&A given regulatory scrutiny),” Zino wrote in an email.
According to Zino, since starting that procedure in 2012, Apple has reportedly given back more than $945 billion in cash to shareholders.
According to analysts, CEO Tim Cook’s warning of $900 million in additional June-quarter costs as a result of U.S. tariffs is linked to Thursday’s slightly more conservative repurchase attitude, which is $10 billion less than last year. Zino stated that the company is uncertain about the potential impact of regulatory changes and tariffs on free cash flow.
It might also mean that they choose to spend more of the free cash flow on capital expenditures for upcoming expansion plans, particularly those related to artificial intelligence. I think it’s a mix of all these things,” he remarked.
“Simply put, it’s not the end of the world but something we think goes against typical AAPL behavior and the company is usually very methodical with its actions,” the analyst stated.
