Apple’s impressive profitability has allowed it to initiate significant share repurchases.
The stock’s rise can be partly attributed to the company’s earnings-per-share growth.
Investors are certainly familiar with just how profitable Apple (NASDAQ: AAPL) is. Its reported net income margin in the fiscal 2026 second quarter (ended March 28) was a fantastic 26.6%. Pricing power and brand loyalty help drive bottom-line performance.
This kind of financial strength has allowed the business to take care of its shareholders. To be more specific, there are 850 billion reasons (and counting) why investors love Apple stock.
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Apple started its capital returns program in 2012. Since then, the business has repurchased $851 billion worth of shares, a truly massive figure that exceeds the current market capitalizations of all but 18 publicly traded companies.
On April 30, Apple added $100 billion in capacity for additional stock buybacks. This adds to the $64 billion remaining on its prior authorization. In total, this means it won’t be long until Apple eclipses $1 trillion in cumulative share repurchases.
All else equal, buybacks introduce a tailwind to earnings per share (EPS) because they reduce the number of shares outstanding. In the past decade, Apple’s diluted EPS has risen at a compound annual rate of 15.5%. During that time, the diluted outstanding share count shrank by about 33%.
Apple’s stock price has soared 1,140% in the last 10 years (as of June 23). Investors should credit some of this performance to the leadership team’s capital allocation policy.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.
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