Consumer electronics giant Apple (AAPL) continues to prize stock buybacks, spending $91 billion on share repurchases in its latest fiscal year, more than any other publicly traded company.
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Apple’s latest financial results showed the company continues to buy back its own stock at a blistering pace, outpacing all other Magnificent Seven technology companies that are spending their free cash flow investing in artificial-intelligence (AI) initiatives.
Apple continues to lead all other companies when it comes to share repurchases, spending nearly $700 billion on them in the last 10 years, significantly reducing its share count as a result. In fact, the $91 billion spent on stock buybacks in its most recent fiscal year was a deceleration from the $106 billion spent the previous year.
Hotly Debated
Stock buybacks remain a hotly debated subject among investors. Critics claim that share repurchases artificially boost a company’s stock, and that the money would be better spent reinvested in the company or providing dividend payments to shareholders.
However, fans of stock buybacks, including famed investor Warren Buffett, say that there’s nothing wrong with companies such as Apple repurchasing their shares. According to Buffett, who owns roughly 2% of Apple and is among the company’s largest stockholders, share repurchases give investors a larger percentage ownership in a business without requiring them to spend more money.
“If a management wishes to further intensify our ownership by repurchasing shares, we applaud,” Buffett has said in the past. However, critics would also like to see Apple invest more of its free cash flow, notably in AI. Apple’s capital expenditures over the past fiscal year totaled $12.7 billion, a fraction of the $92 billion being spent by Google parent company Alphabet (GOOGL) as it ramps up AI investments.
Is AAPL Stock a Buy?
The stock of Apple has a consensus Moderate Buy rating among 35 Wall Street analysts. That rating is based on 20 Buy, 12 Hold, and three Sell recommendations issued in the last three months. The average AAPL price target of $264.07 implies 2.83% downside from current levels.
