Apple Inc (NASDAQ:AAPL) is expected to unveil another massive cash handout this evening, but analysts suggest even this might not be enough please investors worried that demand for iPhones might be waning.
Predictions are for the tech giant to match last year and announce a buyback of US$90bn, which would take the amount it has spent on its shares in the past decade to more than US$660bn.
That is a huge amount, even for Apple, but any criticism would presumably be allayed by the fact that the shares are within touching distance of their all-time high at a time when valuations of other members of the FAANG club have crumbled.
Google owner Alphabet is down around 30% since its high at the end of 2021, with Amazon down 38% over a similar period, while shares in the iPhone maker are up 29% year to date.
Consensus forecasts are for tonight’s second quarter update to show a 4.8% drop in revenue and a 5.8% slide in earnings, pointing to a first annual sales drop since 2019.
“Apple has to grow a lot to generate good returns from here, and there’s no reason to think the growth it has seen over the past several years will continue at that pace,” one analyst told Bloomberg.
Qualcomm’s downbeat update yesterday raised questions about the smartphone market this year, which it said will contract by 4% this year.
But when times get tough, cash is king and Apple is again likely to demonstrate again this is one commodity it has in abundance.