Alphabet is the new king of cash

The corporate world has a new king of cash. The title for the company with the biggest financial reserves, held by Apple for a decade, has passed to Google’s parent, Alphabet… Thes switch in leadership follows a concerted effort by the iPhone maker to reduce its liquid reserves, six years after it first came under pressure from activist investor Carl Icahn to pay out more of its cash hoard. Apple’s holdings of cash and marketable securities, net of debt, has fallen to $102 billion, down from a peak of $163 billion at the end of 2017. Alphabet’s financial reserves have been moving in the opposite direction. At $117 billion, its cash pile has risen by almost $20 billion over the same period… The cash build-up has come despite a surge in capital spending. At $25 billion last year — up from around $13 billion in 2017 — much of the money has been pouring into real estate… Alphabet’s cash is produced almost entirely by its search advertising business, which has been supplemented by strong growth from online video service YouTube. By contrast, Google’s other businesses — such as cloud computing, smartphones and home automation — are believed to have been consuming cash. 

Richard Waters