WSJ "Apple's $715 Trillion Investment Plan in the US May Offer Nothing New"

"Plan Estimate Nearly Matches...
Questions Remain About Cash Reserves"

The Wall Street Journal (WSJ) reported on the 24th (local time) that Apple’s plan to invest more than $500 billion (approximately 715 trillion won) in the United States over the next four years may not be anything new.

AFP Yonhap News

According to WSJ, Apple stated on the same day, "We plan to invest more than $500 billion in the United States over the next four years," adding, "This investment in the U.S. is the largest ever."

Apple, which produces most of its products overseas in countries such as China, is facing the U.S.-China trade dispute, with the Trump administration imposing an additional 10% tariff on Chinese products and Chinese authorities reviewing investigations into Apple’s App Store policies.

WSJ pointed out that Apple’s large-scale investment plan "may mostly consist of things that were already scheduled."

Apple spent about $1.1 trillion on total operating costs and capital expenditures over the past four years. Wall Street forecasts that it will spend about $1.3 trillion over the next four years.

Apple does not classify spending by region, but about 43% of its sales occur in the Americas, including North and South America. The United States accounts for most of this spending, and if spending is proportional to sales, about 40% of Apple’s global spending over the next four years would amount to approximately $505 billion. This figure closely matches the announced investment scale.

WSJ analyzed, "That does not mean there will be no new spending at all," adding, "Considering Apple’s efforts to diversify its manufacturing base outside China, there is a high possibility of additional investment within the United States."

However, it noted, "Even though Apple is currently the most valuable company in the world, it may be difficult to raise $500 billion in new investment funds."

David Vogt, a UBS analyst, mentioned in a report on the same day that Apple repurchased $95 billion of its own shares in the fiscal year ending last September, which accounted for about 80% of its operating cash flow. This means most of the cash has already been used for share buybacks. Vogt said, "Therefore, Apple would have to significantly increase its debt ratio on the balance sheet or slow down the pace of share buybacks, but both possibilities are unlikely."

WSJ explained, "If spending increases sharply, it could burden the stock price," adding, "This is another reason to think that Apple’s investment announcement may be much less dramatic."

Apple’s stock price rose 36% over the past 12 months, surpassing the average of 21% for four major tech companies?Microsoft (MS), Amazon, Meta, and Alphabet?that are investing heavily in artificial intelligence (AI).

WSJ pointed out, "As the growth of the iPhone business slows, Apple has many incentives to prevent costs from increasing significantly."

This content was produced with the assistance of AI translation services.