Apple buys itself some time as it scrambles to catch up in AI
Apple’s board of directors on Thursday announced the authorization of an additional program to buyback up to $110 billion of the company’s common stock. The stock price surged in pre-market trading.
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It is the largest boost ever since the world’s second-most-valuable public company first began repurchasing its stock a little over a decade ago. That, along with a 4% lift to its dividend, accompanied a less-than-impressive report for the company’s fiscal second quarter, during which Apple saw its biggest year-over-year decline in iPhone revenue in nearly four years…
[A] lot is riding on the next iPhone cycle. And that device also could mark Apple’s entry into the race over generative artificial intelligence that has consumed its big tech peers. Microsoft, Amazon, Meta Platforms and Google-parent Alphabet have been launching gen AI-based services and pouring billions more into capital expenditures to build up the networks to support them. The revenue generated by those services is still relatively small, but the payoff from investors has been significant. Those four stocks have averaged a gain of 63% over the past 12 months. Apple’s shares have risen less than 3% in that time.A product event next week is expected to feature new iPads, and the company already seems to have high hopes for that line. Apple Chief Financial Officer Luca Maestri said Thursday that iPad revenue is expected to grow by double digits in the current quarter following five straight periods of declines. And AI-focused announcements at next month’s conference could still cheer investors, especially given the stock’s recently weakened valuation.
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