As of March 31, Apple's cash on hand had grown to an astonishing $256.8 billion - more than a quarter of a trillion dollars.
The Apple Inc. (Nasdaq: AAPL) piggy bank continues to fatten thanks mostly to its "cash cow," the iPhone, which rakes in about two-thirds of the company's profits.
Just as impressive as how much cash Apple has is how quickly it accumulates. The Apple cash pile breached $200 billion as recently as July 2015. It was just five years ago that Apple crossed the $100 billion threshold. And a decade ago Apple's stash stood at only $15.4 billion.
The almost incomprehensible number makes for some very odd comparisons...
Apple Has More Cash on Hand Than Most Companies Are Worth
Apple's $256.8 billion in cash is the most by far of any U.S. company. Second-place Microsoft Corp. (Nasdaq: MSFT), with just $126 billion, has less than half of Apple's cash stockpile.
Apple's cash hoard is so enormous that it's bigger than the market capitalizations of most companies. Only 10 companies in the Standard & Poor's 500 have valuations greater than Apple's cash hoard.
That puts Apple's cash on hand just ahead of the $253.9 billion market cap of General Electric Co. (NYSE: GE) and just behind the $277.2 billion market cap of Wells Fargo & Co. (NYSE: WFC).
If Apple's cash were a country, it would rank 41st, ahead of the gross domestic products of such nations as Venezuela, Pakistan, and Chile.
But all this begs the question: Why does Apple have so much cash, anyway? Why isn't the company spending it on something?
The main reason Apple has so much cash is that most of it consists of profits earned overseas. Apple CEO Tim Cook thinks the U.S. corporate tax rate of 35% is too high, so he's refused to bring the money home. And it keeps piling up.
Don't Miss: The Secret That Can Turn $2,500 into $1 Million or More
About 93%, or $239 billion, of the Apple cash pile consists of stranded profits earned in foreign countries.
But President Donald Trump vowed to reduce the U.S. corporate tax rate during his campaign. And last week his comprehensive tax reform proposal included a call to chop the corporate tax rate to 15%.
If that tax cut (or something close to it) becomes law, the giant Apple cash pile may shrink in a hurry. Apple could then use the money to beef up R&D spending, make a large acquisition or two, and return cash to shareholders in the form of dividends and share buybacks.
That's how most companies use spare cash. But to get a better idea of just how mind-blowingly huge the Apple cash hoard is, here's what the company could do with $256.8 billion...
How Much Cash Does Apple Have? Let's Count the Ways to Spend It
[mmpazkzone name="end-story-hostage" network="9794" site="307044" id="138536" type="4"]
- Unprecedented M&A: Although many would like to see Apple use its cash for a major acquisition, it buys much smaller companies all the time. It could buy 2,568 companies worth $100 million each. Or 25,680 companies worth $10 million each.
- Buy Gold: Apple could afford 208.8 million ounces of gold at today's price of about $1,228 an ounce. That's about 6,505 metric tons - more than the gold reserves of every nation in the world except the United States (and that's if you believe the United States still has its gold).
- Pay an NFL Star: Apple could pay the inflated salary of any NFL star easily. For example, the player with the highest average annual salary, according to Sportrac, is Indianapolis Colts quarterback Andrew Luck at $24,594,000. Apple could pay that salary for 10,441 years - long after Luck had retired.
- Build a Hyperloop: Several companies are running with this Elon Musk idea. Hyperloop One has estimated the cost of building a 107-mile project in the San Francisco Bay area, Apple's backyard, would fall between $9 billion and $13 billion. Apple could build 23 such projects.
- Share the Wealth: Apple could give every man, woman, and child in the United States about $790 each. That's enough to buy all 325 million residents two $329 iPads each and still have almost $43 billion left over.
- Bail Out the United States: Just kidding. Apple's $256.8 billion pales beside the $20 trillion U.S. national debt. Apple's cash would pay off just 1.28% of what the United States owes - not even enough for a decent down payment. Apple could pay off 68% of the $376 billion Greek national debt, however.
Time-Sensitive Briefing: Thanks to just announced, historic legislation, a new pot stock boom is about to blow the doors off anything we've seen up to this point. In a time-sensitive audio briefing, pot stock expert Michael Robinson details five marijuana stocks that are best positioned to skyrocket upon legalization and how you can grab your stake in them. Click here to listen to the briefing...
Follow me on Twitter @DavidGZeiler and Money Morning on Twitter @moneymorning, Facebook, or LinkedIn.
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.