Technological giant Apple(NASDAQ:AAPL) announced stellar fiscal second-quarter results last week. But there is one element of the report, beyond the headlines about strong iPhone sales and solid guidance, that deserves a closer look. Last week, along with its fiscal second-quarter results, the iPhone maker said its board authorized an additional $100 billion in stock buybacks on top of the remaining balance of its existing authorization. Additionally, the board also increased the dividend by 4%.
Put another way, the company’s capital return program continues.
Will AI create the world’s first billionaire? Our team just published a report on a little-known company called “Indispensable Monopoly” that provides critical technology that both Nvidia and Intel need.
Continue “
The move stands in stark contrast to what is happening across much of Big Tech right now, where rivals are committing hundreds of billions of dollars to AI infrastructure. Apple is taking a different path: staying disciplined in its capital spending while returning huge sums to shareholders.
Image source: Apple.
A different type of AI game
While Amazon expects capital expenditures by 2026 of around $200 billion, Alphabet aims for between 180,000 and 190,000 million dollars, and Metaplatforms anticipates between $125 billion and $145 billion (all largely tied to AI), Apple’s spending outlook appears modest. During the first half of fiscal 2026, Apple’s capital expenditures amounted to only about $4.3 billion. Annualized, that’s a rounding error for a company its size.
However, Apple is not ignoring AI. Its A19 and A19 Pro chips include neural accelerators designed for AI workloads, and Apple Intelligence is now present across the company’s entire product line. The tech giant has also partnered with Alphabet to power an upcoming version of Siri with Gemini. But Apple’s push into AI is happening at the edge (on the device itself) rather than through massive data center builds (a less capital-intensive approach).
The financial result of that discipline is surprising. Apple generated more than $82 billion in operating cash flow during the first half of fiscal 2026. Of that, only $4.3 billion went to capital expenditures. The rest is available to the company and shareholders, and Apple has been returning a significant amount. In the first six months of fiscal 2026, the company returned about $45 billion to investors through dividends and share buybacks.
Strong fundamentals support returns on capital
Of course, capital returns only work if the underlying business is maintained. And the fiscal second quarter made it clear that Apple’s business is firing on all cylinders.
For the fiscal second quarter of 2026 (the period ending March 28, 2026), Apple’s revenue increased 17% year over year, a record for the March quarter. And earnings per share increased 22%. Revenue from the iPhone, Apple’s largest product category, also increased about 22% year over year to $57 billion, accounting for more than half of the quarter’s revenue. This strong growth in iPhone revenue was driven by what Cook called “the most popular line in our history (…).” Additionally, Apple’s high-margin services business, which includes the App Store, Apple TV, iCloud, Apple Music and AppleCare, grew 16% year over year to a record $31 billion.
And Apple’s growth had a broad geographic base. One notable region was Greater China, where revenue rose about 28% year over year to $20.5 billion, a sharp turnaround from a region that not long ago was a frequent source of concern for investors. All other geographic segments recorded double-digit growth.
The momentum could also continue. Management guided fiscal third-quarter revenue to grow between 14% and 17% year over year. This strong outlook came even as Cook warned that “we expect significantly higher memory costs” in the period, a reminder that Apple is not immune to the supply pressures spreading across the technology as AI demand puts pressure on memory components.
Ultimately, the fiscal second quarter reinforced the broader story for long-term shareholders. Apple is growing its revenue and profits at double-digit rates while generating enormous free cash flow, which is returning investors on a scale that few companies can match. Ultimately, I think this disciplined approach to AI, coupled with the impressive business momentum shown in the fiscal second quarter, helps explain why Apple stock still looks like a good long-term investment, even with the stock trading near all-time highs.
Should you buy Apple stock right now?
Before you buy Apple stock, consider this:
He Varied and Dumb Stock Advisor The analyst team has just identified what they believe are the 10 best stocks for investors to buy now… and Apple was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you would have $496,473!* Or when NVIDIA made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $1,216,605!*
Now, it is worth noting stock advisor The total average performance is 968.%: An overwhelming outperformance of the market compared to the S&P 500’s 202%. Don’t miss the latest Top 10 list, available with Stock Advisorand join an investing community created by individual investors for individual investors.
See the 10 actions »
*Stock Advisor returns from May 4, 2026.
Daniel Sparks and his clients’ positions at Apple. The Motley Fool positions and recommends Alphabet, Amazon, Apple, and Meta Platforms. The Motley Fool has a disclosure policy.
Apple just gave investors a $100 billion reason to rethink the AI spending race originally published by The Motley Fool
