Apple Inc made history this week after its market cap crossed $1 trillion mark. A staggering stock valuation is not the only big number for the tech behemoth. The iPhone-maker sits on a cash pile of roughly $285 billion. This amount is more than enough to buy India's two most valued companies - Mukesh Ambani-led Reliance Industries and Tata's crown jewel TCS.
The market cap of RIL, India's largest company in terms of revenue, as of today was at Rs 7.45 lakh crore ($109 bn) and valuation of India's largest IT services firm TCS was Rs 7.57 lakh crore ($109 bn). The cash pile of Tim Cook-led company is over Rs 19.54 lakh crore or $285 billion.
This is more than enough to buy 30 odd listed companies of India's largest business house, the Tata Group. The aggregate market capitalisation of India's most valued private enterprise is over Rs 10 lakh crore. With such huge stash of cash reserves, Apple can also buy all four listed companies of HDFC Group. The collective valuation of Deepak Parekh-led financial services conglomerate had recently crossed Rs 10 lakh crore.
With a cash pile of roughly Rs 19.54 lakh crore, Apple can buy out RIL (7.45 lakh crore), TCS (Rs 7.57 lakh crore), Infosys (2.97 lakh crore) in one go and will still be left with over Rs 1.5 lakh crore.
Market Valuation
To put into perspective, the recent spike in stock prices has pushed Apple's valuation to over $1 trillion. This number is close to about 38 per cent of India's total GDP and more than thrice of Pakistan's annual GDP.
Apple's shares jumped after the company released its latest quarterly figures on Tuesday. CEO Tim Cook called it the company's "best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth". Apple had reported a net profit of $48.5 billion in 2017.
The tech giant was first listed on the stock market for $22 a share on December 12, 1980. It had raised $110 million in one of the biggest initial public offerings to date. Those who bought Apple shares at the time of its listing would have seen their returns grow by 40,000 per cent until today.
Apple's rise to the top has been meteoric. In 1985, Apple co-founder Steve Jobs was forced out of the company by CEO John Sculley. Apple Inc.'s m-cap was a paltry $3 billion when Jobs returned to the struggling company as interim chief in 1996, after it acquired his startup, NeXT.
Then came the success of iPod. Apple launched its first iPhone in 2007 and by 2010, it was ready with its first iPad. The back-to-back launch of these tech gadgets set the cash registers ringing.
However, Apple is not the only company to cross $1 trillion valuation. The first company to hit a trillion dollar market cap was PetroChina and that too over a decade ago in 2007.
But it was all short-lived.
According to Bloomberg, PetroChina's m-cap nosedived to less than $260 billion by the end of 2008. This was the biggest ever knock down of shareholders' wealth in world history.
The valuation of Saudi Aramco, the state-owned oil behemoth of Saudi Arabia is pegged to be around $2 trillion. This makes Aramco twice the size of Apple. The company was planning to hit stock markets early next year to sell off 5 per cent shares worth $100 billion.
FAQs
Some claim that the money is stockpiling because Apple is not able to bring it back to the United States for fear of being subjected to corporate taxes. There are, however, other more fundamental reasons, why a company basing itself on innovation chooses to save as much money as possible. Not all assets are cash.
Why does Apple have a lot of cash? ›
Apple is an enormous company that simultaneously manages to carry a large cash balance while increasing long-term debts. The company took advantage of the low-interest-rate environment and locked in significant income from issuing bonds.
How much money does Apple have in cash reserves? ›
Apple now has $162.1 billion in cash on hand, according to the company's fiscal fourth-quarter earnings report released Thursday. The figure is below the company's cash pile from its fiscal third quarter of 2023, when it reported $166.5 billion.
Can Apple buy Reliance? ›
With a cash pile of roughly Rs 19.54 lakh crore, Apple can buy out RIL (7.45 lakh crore), TCS (Rs 7.57 lakh crore), Infosys (2.97 lakh crore) in one go and will still be left with over Rs 1.5 lakh crore. To put into perspective, the recent spike in stock prices has pushed Apple's valuation to over $1 trillion.
Why Apple is borrowing $7 billion while sitting on a $200 billion cash pile? ›
The borrowing is profitable for the company's shareholders by at least one measure: the company's earnings yield, a measure of how much the company earns relative to its share price, is around 5.6%, while it can borrow for 30 years for less than 3%. Apple's not the only one seizing this golden opportunity.
Is Apple cash your money? ›
What is Apple Cash? Apple Cash is a digital card that lives in Wallet. It's an easy way to send and receive money from Messages or from Wallet. And because it's a digital card, your Apple Cash can be spent in stores, online, and in apps with Apple Pay.
What does Apple do with all the cash? ›
Apple's $430 billion in contributions to the US economy include direct spend with American suppliers, data center investments, capital expenditures in the US, and other domestic spend — including dozens of Apple TV+ productions across 20 states, creating thousands of jobs and supporting the creative industry.
How much is Apple in debt? ›
Total debt on the balance sheet as of March 2024 : $104.59 B
According to Apple's latest financial reports the company's total debt is $104.59 B. A company's total debt is the sum of all current and non-current debts.
Why does Apple take on debt? ›
In fact, in this case, it points to Apple's financial prowess. The tech giant started borrowing aggressively about a decade ago to take advantage of ultra-low interest rates. This has helped to fund its buybacks and dividends. Moreover, you'd struggle to find a more profitable enterprise than this one.
Why does Apple hold so much debt? ›
Apple isn't just borrowing to benefit from inflation. They're strategically deploying this capital in areas that yield higher returns. One such area is stock buybacks. Over the past decade, Apple has reduced its outstanding shares from 26 billion to 16 billion, effectively boosting its stock price.
The maximum Apple Cash balance you're allowed to have after verifying your identity is $20,000. If you're part of Apple Cash Family, the maximum Apple Cash balance you're allowed to have is $4,000.
Why is Apple taking money? ›
Purchases can be made with your ID if your Apple ID is compromised (read what to do ➞ If you think your Apple ID has been compromised - Apple Support ) or somebody else has access to your device (require a purchase password as explained in this article ➞ Require a password for App Store and iTunes purchases - Apple ...
Why are US companies hoarding so much cash? ›
A common explanation for the increase in cash-holding has been the increasing importance of rainy-day funds, particularly for firms whose valuations are subjective, and who might struggle to access capital quickly when the need—or opportunity—arises. But there is also another possibility: a desire to minimize taxes.
