- President Donald Trump thanked Apple chief executive Tim Cook after the company announced a $500 billion U.S. investment plan that would create 20,000 jobs. It not only helps Apple gain his favor via his “America First” agenda but could help it avoid tariffs. One analyst called it a smart move, while another thinks it’s unrealistic.
It didn’t take long for President Donald Trump to take his victory lap after Apple announced a plan to spend $500 billion and hire 20,000 people in the U.S. over the next four years.
“APPLE HAS JUST ANNOUNCED A RECORD 500 BILLION DOLLAR INVESTMENT IN THE UNITED STATES OF AMERICA,” Trump posted to his social media platform. “THE REASON, FAITH IN WHAT WE ARE DOING, WITHOUT WHICH, THEY WOULDN'T BE INVESTING TEN CENTS. THANK YOU TIM COOK AND APPLE!!!”
The largest-ever spending commitment by Apple would expand its teams and facilities throughout the country and build a new factory in Texas that would advance its artificial intelligence push. “We are bullish on the future of American innovation, and we’re proud to build on our long-standing U.S. investments with this $500 billion commitment to our country’s future,” Apple chief executive Tim Cook said in a press release.
But in a note to investors, UBS analyst David Vogt said “call us a skeptic…we believe it lacks substance,” referring to the announcement and large headline figure, citing multiple reasons. For one, only 10% of Apple’s supply chain is in the U.S. while the rest is throughout Asia, he told Fortune—and it has probably taken the company close to a decade to make that 10% happen.
His note also points to other parts of the investment plan that don’t quite add up. He estimated that the addition of 20,000 employees would translate to just $5 billion in extra operating expenses per year.
Plus, Apple only spends about $10 billion a year on data-center capital expenditures, per the UBS note, and it only generates about $100 billion a year in free cash flow, of which $90 billion goes to share buybacks, he said.
Given that Apple’s current $10 billion in capex is just a fraction of the $125 billion a year that the new U.S. investment would require, Vogt questions where the additional money will come from, adding that he doesn’t believe Apple will slash its buybacks.
So $500 billion over the next four years is “completely unrealistic mechanically,” Vogt told Fortune, adding that “it’s unclear where the cash flow comes [from] to try to even remotely attempt this.”
Vogt would not comment on why Cook is making this move. But Apple has announced similar investments before: a $350 billion contribution to the U.S. economy in 2018 during Trump’s first term, and an acceleration of that amounting to $430 billion, which was announced in 2021 during the Biden administration.
Since his return to office, Trump has stressed an “America First” policy and has imposed tariffs on imports from China as evidence of such. Apple’s announcement not only cooperates with the president’s agenda but attempts to steer clear of his tariffs.
It comes days after Cook met with the president, and Trump claimed of Apple: “They’re going to build here instead because they don’t want to pay the tariffs.” Not to mention, the technology billionaire had a prime spot for Trump’s inauguration and reportedly personally donated $1 million for the event.
Wedbush analyst Dan Ives pointed out that Apple’s U.S. investment plan diversifies its manufacturing strategy and plays well into “Trump’s U.S. investment theme.”
“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 [it's] smoother waters for [Apple HQ in] Cupertino ahead despite the market agita around AAPL’s growth initiatives with Trump heading down the tariff threat path,” he wrote in a note.
He did not express overt skepticism about Apple’s announcement but said he did not view it as “a signal that Apple is tweaking its China manufacturing buildout.”
Apple did not respond to Fortune’s request for comment.
