Where Does Apple Invest Its Record Cash Pile?


In addition to popular tech gadgets, Apple (NASDAQ:AAPL) is known for having a massive pile of cash sitting on its balance sheet. The position — worth more than the market capitalization of almost every company in the S&P 500 – has attracted the attention of hedge fund managers this year. Apple has been reluctant to use its war chest, but the cash is not exactly collecting dust.

The world’s largest publicly traded company is a moneymaking machine. In the most recent quarter, Apple posted a net profit of $6.9 billion, or $7.47 per diluted share, on revenue of $35.3 billion. The results topped estimates and allowed Apple to grow its cash position to a new record-breaking level.

Taking the total of Apple’s cash and cash equivalents, short-term marketable securities, and long-term marketable securities, the company’s cash position grew to $146.6 billion at the end of June, a fresh all-time high. About $106 billion of that is kept offshore for tax reasons. In comparison, Apple held a total cash position of $117.2 billion a year earlier.

The company’s total cash position is bigger than the entire market capitalization of Dell (NASDAQ:DELL), Hewlett-Packard (NYSE:HPQ), Pandora (NYSE:P), Best Buy (NYSE:BBY), and Netflix (NASDAQ:NFLX) combined.

Apple keeps its cash allocated across several categories. According to the company’s latest 10-Q filing with the U.S. Securities and Exchange Commission, Apple had almost $6.2 billion in pure cash at the end of June — nearly double the amount from the end of last September, with another $5.7 billion in money market and mutual funds.

A whopping $54.1 billion was invested in corporate securities, representing the biggest capital allocation category. Interestingly, it appears that Apple took note of the Federal Reserve’s latest rounds of bond-purchasing: U.S. Treasury securities accounted for $31.3 billion, an increase of 55 percent from the end of September. U.S. agency securities accounted for $18.1 billion.

Mortgage and asset-backed securities represented $15.1 billion of Apple’s portfolio. Other smaller categories like non-U.S. government securities, certificates of deposit and time deposits, commercial paper, and municipal securities accounted for $4.8 billion, $2.1 billion, $3 billion, and $6.3 billion, respectively.

Don’t Miss: Is Participating in the College Debt Bubble Still Worth It?

Follow Eric on Twitter @Mr_Eric_WSCS