Prediction: Nvidia Will Overtake Apple in Stock Buybacks and Dividends Under New Apple CEO John Ternus
The article suggests that under new CEO John Ternus, Apple may shift its strategy from stock buybacks toward increased innovation and product development. It contrasts this with Nvidia, which is increasing buybacks as its free cash flow grows alongside the AI boom.
Why it matters
This shift in corporate strategy could impact investor expectations and the broader tech market's capital allocation trends.
Over his 15-year tenure as CEO, Tim Cook grew Apple ( AAPL +1.75% ) from a market cap of around $350 billion to well over $4 trillion. The strategy was fairly straightforward.
Apple regularly releases new versions of its winning products like iPhone, Mac, and iPad; penetrates a few key product categories in wearables and headphones/earbuds; and expands its services (like app store revenue, advertising, iCloud, Apple Music, Apple TV, Apple Pay, etc.) to complement its hardware ecosystem.
That strategy unlocked steadily rising profits and free cash flow (FCF), which Apple used to reinvest in its core business, grow its dividend, and buy back gobs of its own stock.
For years, Apple has had by far the largest buyback budget of any U.S. company. But that all could change under new CEO John Ternus.
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