Apple’s (NASDAQ:AAPL) capex over the past few years has been much lower than that of other tech giants but the company appears intent on playing catch up and its plan involves a U.S.-focused approach.
On Monday, the company unveiled its biggest-ever investment program, committing over $500 billion in the U.S. over the next four years. This initiative is all about driving American innovation and advanced high-skilled manufacturing, supporting various projects, including AI, silicon engineering, and workforce development. As part of the plan, Apple and its partners will establish a new manufacturing facility in Houston to produce servers essential for Apple Intelligence. These will play a crucial role in powering Apple Intelligence and forming the backbone of its Private Cloud Compute, which integrates advanced AI processing with the most sophisticated security architecture ever implemented at scale for AI cloud computing.
Apple is set to expand its U.S. Advanced Manufacturing Fund, doubling its investment to support the training of future American manufacturers. The company is also ramping up R&D efforts in emerging technologies while planning to hire around 20,000 new employees over the next four years, with most roles centered on R&D, silicon engineering, software development, and AI/ML. Apple intends to launch a Manufacturing Academy in Detroit, offering specialized courses aimed at boosting skills in project management and optimizing manufacturing processes to improve efficiency, productivity, and quality across its supply chain.
Given the geopolitical situation and current trade uncertainty, Wedbush analyst Daniel Ives applauds what appears to be a canny decision. “We believe this was a strategic move by Cook & Co. to continue diversifying its manufacturing strategy in both the US and globally while also playing well into Trump’s US investment theme given the $500 billion Project Stargate announced earlier this year,” the analyst said. “Cook continues to prove that he is 10% politician and 90% CEO and times like this he will be using his strong ties globally to make sure its smoother waters for Cupertino ahead despite the market agita around AAPL’s growth initiatives with Trump heading down the tariff threat path.”
Apple has long relied on China as a key hub for manufacturing and supply chain operations, however, as these initiatives are “not areas Cupertino focuses on for its China region,” Ives does not see this as an indication Apple is “tweaking its China manufacturing buildout.”
Bottom line, Ives maintained an Outperform (i.e., Buy) rating on the shares along with a Street-high $325 price target. Should the figure be met, investors will be pocketing returns of 32% a year from now. (To watch Ives’ track record, click here)
The Street’s average target, however, is a more muted $250.95, suggesting the stock will stay rangebound for the time being. On the rating front, based on 18 Buys, 11 Holds and 4 Sells, the analyst consensus views this stock a Moderate Buy. (See Apple stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.