Apple Announces Record $110 Billion Stock Buyback Program after an Outperforming FY2Q Earnings

Apple surpassed modest expectations with its quarterly results and outlook by unveiling a historic share repurchase program, leading to a nearly 7% spike in its stock price after hours.

The tech giant raised its cash dividend by 4% and approved a plan to repurchase $110 billion of shares, marking its largest buyback ever.

Although Apple’s quarterly revenue saw a decline, it was not as steep as analysts had predicted. CEO Tim Cook expressed confidence in a return to revenue growth in the current quarter, indicating a potential resurgence in the competitive smartphone market.

During the fiscal second quarter, Apple recorded a 4% drop in revenue to $90.8 billion, surpassing the average analyst projection of $90.01 billion. Looking ahead to the current quarter ending in June, Cook anticipates low-single-digit growth in overall revenue, while Wall Street expects the tech giant to grow by 1.33% to $82.89 billion.

Apple’s stock performance has lagged behind other tech giants recently due to challenges such as weakening iPhone demand and increased competition in China. Despite these obstacles, Apple remains optimistic about double-digit growth in services and iPad revenue for the ongoing quarter.

While facing various industry challenges, including regulatory scrutiny, Apple is ramping up its investment in research and development, particularly in generative AI. With over $100 billion spent in R&D over the past five years, Cook hinted at exciting developments to be revealed later this year.

The market responded positively to Apple’s strategic buyback initiative, which is seen as a move to build investor confidence amid ongoing transformations within the company.