Apple poised to emerge from downturn even stronger and more powerful

Flush with cash, Apple and other “Big Tech” firms like Alphabet (Google), Amazon, and Microsoft are positioned to emerge from an economic downturn stronger and more powerful.

Tripp Mickle for The New York Times:

The dissonance between the stock market’s relative panic and the business-as-usual calm among tech giants foreshadows a period when analysts, investors and economists predict that the world’s largest companies will widen their lead in their respective markets.
The bullishness about their prospects reflects an understanding that the companies have tight control of some of the world’s most lucrative businesses: social media, premium smartphones, e-commerce, cloud computing and search. Their dominance in those arenas and toeholds in other businesses should blunt the pains of inflation, even as those challenges hammer big companies such as Walmart and Target and the stock market nears bear market territory.
The S&P 500 spent much of Friday below the threshold for what is considered a bear market — commonly defined as 20 percent below its last peak — before rallying late in the afternoon. The index ended the week with a loss of 3 percent, its seventh straight weekly decline. That’s its longest stretch of losses since 2001.
In the months ahead, Microsoft, Google, Apple and Amazon are expected to boost hiring, buy more businesses and emerge on the other side of a bearish economy stronger and more powerful — even if they shed some of their total valuation and their relentless growth of the last few years.
During the Great Recession, Facebook, Amazon, Google, Apple and Microsoft acquired more than 100 companies from 2008 to 2010, according to Refinitiv, a financial data company. Some of those deals have become fundamental to their businesses today, including Apple’s acquisition of the chip company P.A. Semi, which contributed to the company’s development of its new laptop processors…

MacDailyNews Take: Wrong via exclusion. Apple Silicon powers not only notebooks, but also the world’s best desktops, smartphones, and tablets.

The cash reserves could fund accelerated stock buybacks as share prices fall, analysts say. Doing so would increase the companies’ earnings per share, deliver more value to investors and signal to the market that their firms are more valuable than Wall Street is willing to acknowledge…
“Big Tech is going to be more powerful. And what’s being done about it? Nothing,” [Richard Kramer, founder of the London-based advisory firm] Arete Research said.

MacDailyNews Take: At the end of April, Apple’s board of directors authorized an increase of $90 billion to the existing share repurchase program. Perfect timing for scooping up laughably undervalued AAPL shares!
During any downturn, Tim Cook merely needs to follow Steve Jobs’ playbook:
We’ve had one of these before, when the dot-com bubble burst. What I told our company was that we were just going to invest our way through the downturn, that we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into Apple in the first place — the last thing we were going to do is lay them off. And we were going to keep funding. In fact we were going to up our R&D budget so that we would be ahead of our competitors when the downturn was over. And that’s exactly what we did. And it worked. And that’s exactly what we’ll do this time. — Steve Jobs, March 2008
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