Apple and other major technology companies are known for sitting on huge piles of cash, and during the third quarter, their cash stacks continued to skyrocket. Apple held $155.3 billion in cash as of the end of last year’s third quarter, but that cash stockpiled climbed by almost 33% year over year to $206.1 billion. The company has raised the ire of shareholders for sitting on so much cash in the past, so will this report raise more calls for increased capital returns?

We’ll have to wait a bit to find out.

Apple, IT lead the way in cash building

S&P Capital IQ’s Global Markets Intelligence unit examined the S&P 500’s nine sectors, excluding Financials, to figure out which of the sectors saw their cash balances rise or increase during the third quarter. Overall, non-Financial companies saw their corporate cash balances rise to $2.06 trillion in total, an increase of less than 4% from last year’s $1.98 trillion.

Director Richard Peterson reports that the Information Technology sector saw the biggest increase in cash balances and accounted for 40.7% of the non-Financial cash balances in the S&P 500 during the third quarter. At the end of the same quarter last year, non-Financials held a 38.3% share of the S&P 500’s cash balances.

Apple’s massive size means that it can serve as either a massive weight or massive boost to the S&P 500 in general, and it’s no different in terms of cash balances. According to S&P Capital IQ, the iPhone maker’s $2.06 billion in cash is 10% of the total non-Financials cash balances in the S&P 500.

Most sectors see cash holdings rise

Apple’s almost 33% year over year increase in its cash balance means that the Information Technology sector as a whole enjoyed a double digit percentage increase. The other sectors which also saw increases in the double digit percentages were Utilities and Telecommunications.

S&P Capital IQ also found that two sectors – Industrials and Energy – saw their cash balances shrink year over year. The Energy sector was hit by the continued decline in oil and gas prices, which in turn triggered a sharp profitability decline and resulted in almost a $12 billion decline in cash year over year.

The firm links the cash decline in the Industrials sector partially to General Electric‘s recent decision to focus more on industrial operations while dumping many of its financial operations like GE Capital. GE’s total long-term and short-term investments and cash equivalents fell from $69.7 billion last year to $53.7 billion this year.

Not including the Information Technology sector, S&P Capital reports that total non-Financial cash balances in the U.S. declined slightly year over year. The firm warned that investors worried about current stock valuations and the tepid earnings growth, these movements in cash balances “may represent another cause for investor apprehension.” Here’s a look at the third quarter year over year movements in corporate cash balances during the third quarter by sector:

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Corporations to up their cash usage in 2016

With all the increases in corporate cash balances, especially in the IT sector, it’s important to consider how corporations are using their massive cash hoards. In November, Goldman Sachs analyst David Kostin and his team predicted that companies in the S&P 500 will increase their cash usage 5% next year to $2.2 trillion.

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They expect more than half (54%) will be used for investments for growth like capital expenditures, research and development, and mergers and acquisitions and 46% will be used for returning cash to shareholders through share repurchases and dividends. Spending on mergers and acquisitions is expected to decelerate dramatically to 8% after this year’s 50% surge.

They noted in a report dated Nov. 6 that cash balances in the S&P 500 continue to be at historical highs at $1.5 trillion excluding the Financials sector and amounting to 11% of total assets.

Capex won’t rise much

Kostin doesn’t expect S&P 500 companies to spend a lot on capital expenditures next year because the Energy sector will likely hold back significantly.

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Indeed, the decline in the sector’s cash stockpile provides enough evidence to support this view. Overall, Goldman expects total capital expenditures in the S&P 500 to rise 1% and noted that the Energy sector typically accounts for 30% of the total.

In 2016, however, they expect Energy companies to cut their capex spending 20% after this year’s 25% decline. Excluding the Energy sector, they expect capex spending to increase 6% next year.

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Returning cash to shareholders

Whenever a company is sitting on huge amounts of cash, as Apple has been for a long time, shareholders start to clamor for increases in capital returns. Kostin expects S&P 500 companies to return over $1 trillion to shareholders next year, including a 7% increase each in share repurchases and dividends. The analyst believes that the high cash return strategies will outperform because of modest growth in gross domestic product, low interest rates, and “slim” returns on equities. Indeed, cash return stocks have long outperformed others:

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He added that this year’s macro environment will likely be similar to that of next year as corporations rewarded shareholders with high cash returns, spurning capital expenditures in the process. The IT sector has been leading the way in share repurchases for some time:

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Companies with lots of cash to outperform

In another report dated Nov. 23, Kostin and his team suggested that the stocks of corporations with strong balance sheets will outperform others due to the expected interest rate increase from the U.S. Federal Reserve.

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Back to Apple – it is not only about the cash – the company is literally leading the S&P 500 over the past few years. Some key highlights from Goldman:

The 350 bp margin expansion from 5.9% at the trough of the cycle in 2009 to the current level of 9.1% has been driven by Information Technology. Tech accounted for 48% of the overall S&P 500 margin expansion during the past six years. Apple alone was responsible for 18% of the market-wide margin increase and 40% of the Tech sector margin expansion (see Exhibit 32). The Technology sector now has margins that are twice the overall market.

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Apple is also expected to lead “the troops” going forward – see the chart below.

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Factset Research notes a similar trend. In a resent report, Factset stated:

Apple will be a focus company for the market this week, as the company is scheduled to report earnings for the calendar third quarter (fiscal fourth quarter for Apple) on October 27. The current mean EPS estimate for the company for Q3 2015 is $1.87, compared to year-ago actual EPS of $1.42.

Apple is expected to be the largest contributor to earnings growth for the Information Technology sector for Q3 2015. The blended earnings growth rate (combines actual results for companies that have reported and estimated results for companies yet to report) for the Information Technology sector is 2.1%. Excluding Apple, the sector would report a year-over-year decline in earnings of 3.0%.

If Apple reports actual EPS equal to or above the mean EPS estimate, this will mark the 5th consecutive quarter that Apple has been the largest contributor to earnings growth for the Information Technology sector.

What is driving Apple’s substantial contribution to earnings growth for the Information Technology sector in recent quarters?

The iPhone product segment has reported revenue growth in excess of 50% in the previous three quarters, and is projected to report revenue growth of 32% in Q3 2015. However, year-over-year comparisons for iPhone sales become more challenging starting in Q4 2015. Thus, Apple is not predicted to be a significant contributor to the expected earnings growth for the Information Technology sector for the first two quarters of 2016.

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So while Apple is not the S&P 500 and the S&P 500 is not Apple the two are connected closely for better or worse.