M&A hopes rise at Apple on $165 billion balance sheet

Bloomberg reports that due to Apple's slowdown in growth and the company's large cash balance, there have been rumors of a possible major acquisition. Walt Disney Co (NYSE:DIS), Netflix Inc (NASDAQ:NFLX), Tesla (NASDAQ:TSLA), Peloton Interactive Inc (NASDAQ:PTON) and Sonos (NASDAQ:SONO) stocks have been named as potential acquisition targets, but Apple has previously been frustrated with deals like this.

Apple is known for its strategy of acquiring small startups to strengthen its market position, rather than large acquisitions like other companies such as Microsoft Corp (NASDAQ:MSFT) and Amazon.com Inc (NASDAQ:AMZN) do. In fiscal 2022, Apple returned more than $100 billion to its shareholders in the form of dividends and share repurchases, and at the end of the year, the company had more than $165 billion in cash and marketable securities. If Apple shares continue to rise this year, the company will most likely not change its strategy. Over the past 20 years, Apple has averaged a 39% annual return, including dividends, which is 3.9 times the S&P 500 average.