With big acquisitions largely out of the question under current U.S. But its net cash remained at $66 billion at the fiscal year's end. Apple generated $104 billion in cash from operations in fiscal 2021 and returned $106.5 billion to shareholders. That goal, for which Apple never specified a deadline, has been tough to meet because it simply keeps making money. To be sure, one of the primary drivers of Apple's ballooning valuation is the goal it set in 2018 to get what at the time was nearly $100 billion in net cash off its balance sheet and become net-cash neutral. Its App Store business model, which takes commissions on in-app purchases of digital goods, has been targeted by proposed legislation in the United States and Europe. He has a market-perform rating on the stock.Īnother concern is uncertainty over Apple's ability to lock in the same profits for paid services on its future hardware. Sacconaghi also saw "no obvious catalysts for multiple expansion" in Apple's stock "given slower expected growth" in the next fiscal year. Moreover, the entire market for those devices is not likely to near the billion-unit mark until 2040, he wrote. In a December note to investors, Bernstein analyst Toni Sacconaghi warned that Apple's prospects in the augmented and virtual reality category are bright but likely to account for only 4% of its revenue by 2030. The bear case, however, is that Apple is hitting the limits of how much it can grow its user base and how much cash it can squeeze from each user, with no guarantees that future product categories will prove as lucrative as the iPhone.
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