The Information : Apple's Cash Strategy Shift

Apple's Cash Strategy Shift

Tim Cook is going out with a bang. Apple reported a stellar March quarter on Thursday, delivering 17% higher revenue, thanks to 22% growth in iPhone revenues, a big change from several years of anemic growth in sales of the ubiquitous device. In other words, far more consumers are upgrading their old iPhones than has been the case for a while.

Cook, who recently announced he would step down as CEO—to be succeeded by hardware executive John Ternus—on Sept. 1, was as ebullient as ever on Thursday’s call. As is the Apple way, he and Ternus traded over-the-top compliments. Ternus described Cook as “one of the greatest business leaders of all time,” while Cook gushed, “There is no one on this planet I trust more to lead Apple into the future than John Ternus.” Even before Cook steps down, though, Apple is making some big changes.

For one thing, as Cook pointed out on an earnings call, the company increased its research and development spending 34% in the quarter, reflecting investments to take advantage of “opportunities we see in both” products and services, Cook said. Apple has never been known for its lavish R&D expenditures—as a percentage of revenues, its R&D expense has hovered around 8% in the past few years, about half that of Google parent Alphabet. With AI transforming tech and expected to usher in a new generation of devices, Apple clearly doesn’t want to be left behind.

In the same vein, Apple Chief Financial Officer Kevan Parekh revealed on an analyst call that the company was abandoning its long-standing cash management strategy of aiming to be “net cash neutral"—which means having equal amounts of cash and debt on the balance sheet. Introduced in 2018 under former CFO Luca Maestri and Cook, that philosophy underpinned consistently massive stock buybacks. Apple’s net cash—cash on the balance sheet after deducting debt—shrank to $62 billion as of March 31, from $163 billion when the target was announced in 2018.

Parekh didn’t explain the change of heart in meaningful language—preferring corporate blather—but the shift raises the prospect that Apple wants to stockpile cash more than it has been doing. While it raised its dividend and announced a new buyback program, the company cut its stock buybacks in half in the March quarter from the year-earlier period, even though free cash flow jumped 28% compared with that period. (Parekh hinted that the quarter's buyback reduction was related to the announcement of the CEO transition: Much speculated about beforehand, it possibly contributed to volatility in Apple stock.)

Why would Apple want to keep more cash on hand? It‘s possible Cook and Ternus want to be prepared for skyrocketing memory chip prices, which Cook hinted he was expecting. But stockpiling cash could position Apple well at a time its counterparts in big tech are running down their cash reserves dramatically with massive capital expenditures. Imagine what assets might come up for sale, for instance, that other companies won’t have the money to buy? Of course, Apple historically hasn’t done major acquisitions. But it’s possible the next few years will bring more radical changes to the company than might now be apparent.

The Information : Starcloud in Talks for $2.2 Billion Valuation as SpaceX Stirs

Starcloud in Talks for $2.2 Billion Valuation as SpaceX Stirs Interest

The Takeaway
  • Starcloud discusses raising $200 million one month after last funding round
  • Startup launched first satellite with Nvidia Hopper chip in November
  • SpaceX, Blue Origin stoke interest in orbital data centers, but big hurdles remain

Starcloud, a two-year-old startup building orbital data centers, has told investors it’s in talks to raise at least $200 million at a valuation of around $2.2 billion after the investment, according to a person involved in the deal.

The discussions come just one month after Redmond, Wash.-based Starcloud said it raised $170 million at a $1.1 billion valuation including the investment, which was co-led by early-stage firm Benchmark and private equity firm EQT. The startup’s funding target, following so closely on the last round, speaks to perceived investor excitement over the concept of putting data centers in low earth orbit, where they can take advantage of abundant solar energy. SpaceX CEO Elon Musk has made the concept a key aspect of the rocket company’s upcoming IPO, though many others in the data center industry are skeptical of the technology.

Starcloud aims to provide data centers in space to AI cloud providers like Crusoe and other customers such as the U.S. Department of Defense. But its business is still in its early stages. In November, the startup launched its first satellite—a demonstration satellite with a single Nvidia H100 GPU—aboard a SpaceX Falcon 9 rocket. The company hopes to launch a second, more powerful satellite by the end of this year. Its revenue couldn’t be learned, but it is likely to be small.

The fundraising is also notable because it would be the latest example of a startup selling shares at higher prices in fundraising rounds that are only weeks or months apart. This tactic, which has become even more prevalent during the AI rush, can give the earlier investors large returns on paper quickly and help the company advertise the final, high valuation to customers and employees. But investors complain these fast-follows can be misleading, since the startup may only announce one valuation.

In Starcloud’s case, the startup announced the valuation of its last round, which was split into two tranches. Benchmark led the first, while EQT Ventures, the venture arm of EQT, participated, the company said last month. Both firms co-led the extension funding round. It couldn’t be learned what investors paid for each tranche.

The company was co-founded by CEO Philip Johnston, a former McKinsey consultant and e-commerce entrepreneur; chief engineer Adi Oltean, a former software engineer at SpaceX and Microsoft; and chief technical officer Ezra Feilden, an aerospace engineer who worked at Airbus. Starcloud was part of accelerator Y Combinator’s 2024 summer class.

Starcloud has huge ambitions in an increasingly crowded field where it will go up against the likes of SpaceX and Jeff Bezos’ Blue Origin. Starcloud in March asked the Federal Communications Commission for permission to launch up to 88,000 satellites that would “operate as a distributed datacenter in space.” The filing did not contain details about when or how the company would expect to launch that many satellites, though Starcloud has said it’s designing future satellites to launch from SpaceX’s Starship spacecraft.

However, the Starship program has been delayed for years. And SpaceX has ambitions of using the craft to launch up to 1 million of its own data center satellites, in addition to its own Starlink satellites and missions for other commercial customers and governments. Blue Origin also wants to launch more than 50,000 satellites for AI computing. Only about 25,000 satellites have been launched into orbit in human history, according to the European Space Agency.

>>> Europe : Brokers Upgrades & Downgrades - 1st of May 2026 V2(+)

>>> Up
* Caterpillar Raised to Equal-Weight at Morgan Stanley; PT $915
* CNH Industrial Raised to Outperform at Mediobanca SpA; PT $13
* Danske Bank Raised to Buy at Jyske Bank; PT 375 kroner (+)
* Elkem Raised to Buy at SEB Equities; PT 33 kroner
* Eni Raised to Buy at DBS Bank; PT 27 euros
* Halfords Raised to Buy at Canaccord; PT 170 pence (+)
* Repsol Raised to Buy at Goldman; PT 25 euros

>>> Down
* Adecco Cut to Neutral at Citi; PT 18 Swiss francs
* Aker Solutions Cut to Hold at Pareto Securities; PT 45 kroner
* Elf Beauty Cut to Equal-Weight at Morgan Stanley; PT $67
* Hays Cut to Neutral at Citi; PT 33 pence
* Pagegroup Cut to Neutral at Citi; PT 130 pence
* Randstad Cut to Neutral at Citi; PT 25 euros
* Severn Trent Cut to Neutral at Citi; PT 3,329 pence
* Technip Energies Cut to Neutral at Goldman; PT 37 euros
* United Utilities Cut to Neutral at Citi; PT 1,525 pence (+)

>>> Initiation
* Astera Labs Rated New Neutral at Rothschild & Co Redburn (+)
* Celestica Rated New Buy at Rothschild & Co Redburn; PT C$624.86 (+)
* Ciena Rated New Neutral at Rothschild & Co Redburn; PT $416 (+
* Coherent Corp Rated New Buy at Rothschild & Co Redburn; PT $455 (+)
* Credo Technology Rated New Buy at Rothschild & Co Redburn (+)
* Genus Rated New Overweight at JPMorgan; PT 3,200 pence
* Lumentum Rated New Buy at Rothschild & Co Redburn; PT $1,270 (+)
* Var Energi Rated New Buy at William O'Neil

>>> Call
* Goldman’s Covello Says Buy AI Hyperscalers Over Chipmakers
* Paramount Double-Upgraded at Morgan Stanley on Warner Deal

>>> What to look at today - 1st of Mayl 2026

US equity-index futures advanced, signaling that a rally which pushed Wall Street gauges to record highs on strong megacap tech earnings may have further to run. The yen edged lower, paring some of its gains triggered by Japan’s intervention. Contracts for the S&P 500 Index advanced 0.2% and those for the Nasdaq 100 climbed 0.1% after the underlying gauges closed at all-time highs on Thursday, on optimism about the outlook for US company earnings. Apple Inc. shares almost 2% in extended trading after delivering a strong revenue forecast, even as it warned of higher memory-chip costs. Meanwhile, the yen was slightly weaker at around 157.25 per dollar after rising as high as 155.57 on Thursday. The currency had been approaching the 161 level before Japan’s government stepped in with its support. The country’s Nikkei stock index gained 0.6%, with several Asian markets shut for a holiday.
Traders had plenty to contend with in April, as oil prices surged on the Middle East crisis with no resolution in sight, yet US stocks posted their best month since 2020, driven by a resurgence in technology shares and the artificial intelligence trade. Investors will test that narrative in the coming weeks, watching whether AI-led momentum can offset price pressures and geopolitical risks. While US gross domestic product accelerated during the first quarter, thanks to the massive upswing in AI business investment, it also showed inflationary pressures picked up sharply in March as the war spurred a surge in gasoline prices. The personal consumption expenditures price index — the Fed’s preferred measure of inflation — rose 0.7% last month, the most since 2022. Inflation concerns are increasing with European Central Bank policymakers likely to raise interest rates at their next meeting in June unless there are positive developments on energy prices and ending the Iran war, according to people familiar with the situation. In other corners of the market, US crude was steady around $105.10 a barrel after falling in the prior session. President Donald Trump said he was sticking with a naval blockade of Iranian ports as concerns mount that the vital Strait of Hormuz wouldn’t reopen anytime soon.  The dollar edged up 0.1% after wrapping up its worst month since June. Treasuries gave up some of their gains from the prior session, with the yield on the 10-year note rising two basis points to 4.39%. Gold traded around $4,620 an ounce. In Asia, attention was on Japan, and what steps the authorities will take after the yen’s surge in the prior session. The yen’s intervention-fueled rally is at risk of evaporating quickly, increasing the likelihood that Japan will have to wade back into the market to shore up the exchange rate, analysts said. Until now, the currency had been trading close to its cheapest levels in four decades, risking faster inflation by making imports — including already soaring oil — pricier. Atsushi Mimura, the country’s top currency official, said authorities are maintaining readiness to intervene in the crude oil futures market, where speculative moves have been affecting the currency. Japan has also started additional release of national oil reserves, Kyodo reported.

Nikkei Hang Seng CSI Shanghai Shenzen

Eur$ CNH CNY JPY GBP CHF RUB TRY WTI$ Gold BTC ETH

S&P +0.18% Nasdaq +0.07% EuroStoxx / FTSE -0.12% Dax / SMI /

Macro :
- Goldman’s Covello Says Buy AI Hyperscalers Over Chipmakers

Keep an eye on :
- AIR FP : Airbus Names Eric Kirstetter Strategy Chief From May 18
- AIR FP : Bangladesh’s State Airline Orders 14 Boeing Planes
- AMGN US : Amgen 1Q Adjusted EPS Beats Estimates: Snapshot
- AAPL US : Apple Falls After Soft iPhone Sales Beat Dampens Enthusiasm
- AZN LN : AstraZeneca’s Truqap Gets FDA Panel Backing For Prostate Cancer
- IAG LN : British Airways Pilots Reject Proposed Pay Overhaul: Sky News
- CLX US : Clorox Cuts FY Outlook on Energy, Acquisition Costs
- DBV FP : DBV Tech 1Q Loss per Share 11C, Est. Loss/Shr 13C
- DOU GY : Douglas Group 2Q Sales Under Estimates
- DGE LN : US to Allow Preferential Duty Access for UK Whiskey, Greer Says
- EMN US : Eastman Chemical 1Q Adjusted EPS Beats Estimates
- EL FP : EssilorLuxottica Heirs Reach Terms, Clearing Way to Close Estate
- EQT US : Shale Driller EQT Sees 50% Increase in Natural Gas-Trading Desk
- JNJ US : J&J to Discontinue CD20, CD19-CD20 CAR-T Programs
- NWG LN : NatWest 1Q Pretax Operating Profit Beats Estimates
- NIO LN : NIO Inc. April Deliveries 29,356 Vs. 35,486 M/M
- 7201 JP : Nissan Scraps Plan to Build EVs at Mississippi Plant: Nikkei
- NOVOB DC : Novo-Backed Biotech Hemab Raises $301.5 Million in Upsized IPO
- NOVOB DC : Novo-Backed Drugmaker Avalyn Soars 44% After $300 Million US IPO
- NVDA US : Huawei’s AI chip sales surge as Nvidia stalls in China
- Open AI IPO: OpenAI Finance Chief Sees ‘Vertical Wall of Demand’ for Products
- PSON LN : Pearson Sees Earnings Meeting Guidance
- PRO LN : ProService Building Services Marketplace PLC: Earnings in Line With Market Views
- ROR LN : Rotork Sees Earnings in Line With Expectations
- SNDK US : Sandisk 4Q Adjusted EPS Forecast Beats Estimates
- SCHO DC : Schouw 1Q Revenue DKK7.70B; 2026 Outlook Maintained
- SLR SM : Solaria Registers Share Capital Increase Deed With Registry
- PRTC L N : Seaport Therapeutics Said to Raise $255 Million in IPO
- SBGI US : Sinclair 1Q Adjusted Ebitda Beats Estimates
- SOLV US : Solventum Rises as Trian Calls on Board to Implement Changes
- TSLA US : Tesla Made $573 Million in Sales From SpaceX and xAI Last Year
- TIT IM : Telecom Italia’s Share Capital Reduced to EU6b
- TFI FP : TF1 1Q Revenue Misses Estimates
- UCB BB : UCB to Buy IMIDomics’ Patient Insight Business; No Terms
- UMI BB : Umicore Expects Group Adj. Ebitda for 2026 to Approach €1b

>>> Europe : Brokers Upgrades & Downgrades - 1st of May 2026

>>> Up
* Caterpillar Raised to Equal-Weight at Morgan Stanley; PT $915
* CNH Industrial Raised to Outperform at Mediobanca SpA; PT $13
* Elkem Raised to Buy at SEB Equities; PT 33 kroner
* Eni Raised to Buy at DBS Bank; PT 27 euros
* Repsol Raised to Buy at Goldman; PT 25 euros

>>> Down
* Adecco Cut to Neutral at Citi; PT 18 Swiss francs
* Aker Solutions Cut to Hold at Pareto Securities; PT 45 kroner
* Elf Beauty Cut to Equal-Weight at Morgan Stanley; PT $67
* Hays Cut to Neutral at Citi; PT 33 pence
* Pagegroup Cut to Neutral at Citi; PT 130 pence
* Randstad Cut to Neutral at Citi; PT 25 euros
* Technip Energies Cut to Neutral at Goldman; PT 37 euros

>>> Initiation
* Genus Rated New Overweight at JPMorgan; PT 3,200 pence
* Var Energi Rated New Buy at William O'Neil

>>> Call
* Goldman’s Covello Says Buy AI Hyperscalers Over Chipmakers
* Paramount Double-Upgraded at Morgan Stanley on Warner Deal

>>> US After Hours Summary: AAPL +4% higher on earnings, other earnings winners

After Hours Summary: AAPL +4% higher on earnings, other earnings winners include TEAM +23.3%, TWLO +17.9%, FIVN +15.8%, WEAV +13%, RDDT +10.4%; RBLX -20.1%, WDC -8.2%, FND -7.7%, SNDK -7.4% lower on earnings; VEEV +9.8% to join S&P 500

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: TEAM +23.3%, TWLO +17.9%, FIVN +15.8% (also $90 mln accelerated share repurchase; new $200 mln share repurchase program), WEAV +13%, RDDT +10.4%, MATW +9.1%, BOOM +7.3%, CERS +6.4%, EBS +6.3%, ROKU +6%, MTZ +5.9%, ACCO +5.3%, OLED +5% (also authorizes new $400 mln share repurchase program), ZETA +4.8%, DBVT +4.8%, COHU +4.6%, HUN +4.4%, MHK +4.2%, AAPL +4% (also increases dividend 4%; authorizes additional program to repurchase up to $100 bln of common stock), GDDY +3.7%, EMN +3.6%, CWST +3.5%, PK +3.5%, SPSC +3.2%, SBGI +2.9%, NEWT +2.9%, JAKK +2.9%, AJG +2.2%, CORT +2.1% (also phase 2 study of Dazucorilant data), TRUP +2.1%, RHP +2%, HG +2%, HR +1.6%, MTX +1.4%, EGO +1.3%, ACA +1.2%, ATR +1.1%, ALGT +1.1%, WY +0.8%, ENSG +0.5%, RIOT +0.4%, AEM +0.3%, FSLR +0.3%

Companies trading higher in after hours in reaction to news: VEEV +9.8% (to join S&P 500), CTNM +8% (reports topline data from PIPE-791 phase 1b trial), XE +1.5% (PPL units and XE are collaborating to explore deploying Xe-100 small modular reactor in Kentucky), IE +1.4% (files mixed securities shelf offering), GEHC +1% (CEO and GC insider buys), PANW +0.9% (to acquire Portkey, a pioneer in AI Gateways), SA +0.8% (KSM Project named a Priority Project by the Province of British Columbia), NNDM +0.6% (provides update to strategic alternatives review process), XWIN +0.6% (successful launch of its AI Inference Platform), BANR +0.6% (to acquire Pacific Financial), LRMR +0.5% (announces publication), VALE +0.5% (clarifies press reports), EH +0.4% (to delay 20-F filing), PPL +0.3% (PPL units and XE are collaborating to explore deploying Xe-100 small modular reactor in Kentucky), KKR +0.3% (KKR and Neuberger Private Markets to jointly acquire Flow Control Group), TXT +0.2% (selected by Near Earth Autonomy as a partner), SM +0.2% (closes on sale of certain South Texas assets), RTX +0.2% (increases dividend; also awarded a $335.1 mln modification to Navy contract), JNJ +0.2% (CD20 mono CAR-T cell therapy and CD19-CD20 bi-CAR-T programs will be discontinued), GE +0.1% (awarded a $107.7 mln Defense Logistics Agency delivery order), PBR +0.1% (provides Q1 operations update)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SMMT -23.1%, RBLX -20.1%, INGM -11.5% (also increases dividend; also increases buyback auth by $100 mln), ALHC -8.7%, WDC -8.2% (also increases dividend), FND -7.7% (also authorizes new $400 mln share repurchase program), SNDK -7.4%, CLX -6.6%, RMD -5.8% (also CFO to retire; names new CFO), AXTI -5.8%, TREE -5.4%, DXCM -5.2%, HCC -5.2%, SNDX -4.8%, RIVN -4.1% (also files mixed shelf offering, also increasing production capacity to 300K vehicles at Stanton Springs), SAM -3.4%, NSP -3%, IRTC -2.8%, DLB -2.3%, SPXC -2%, IMAX -1.9%, LNT -1.9%, LPLA -1.9% (also resumes share repurchase program), CABO -1.9%, AMGN -1.7%, EHC -1.5%, MPWR -1.5%, FEIM -1.3%, RYAN -1.2%, KWR -0.9%, AIG -0.7% (also increases dividend), ILMN -0.5% (also increases share repurchase authorization by $1.5 bln), ARDX -0.4%, SYK -0.4%, AX -0.2%

Companies trading lower in after hours in reaction to news: SENS -14.8% (commences stock offering), GRO -8.6% (stock offering), AIV -2.2% (declares a $1.30/share liquidating distribution), MPWR -1.5% (resolution of patent infringement lawsuit), TLX -1.5% (MAA filed in Europe for TLX101-Px has been validated and accepted for review), GD -1.2% (awarded a $716.2 mln US Army contract), VKTX -0.7% (LGND provides Viking (VKTX) updates), MTRX -0.6% (CFO to step down), EQNR -0.3% (files mixed securities shelf offering), MC -0.3% (stock offering), TRVI -0.1% (presentation and multiple posters accepted at ATS Conference)