Also, Apple shareholders voted down a proposal to end its DEI program.
Apple (NASDAQ:AAPL) stock ticked slightly higher this week after the iPhone maker announced plans to invest $500 billion in U.S. manufacturing over the next four years.
The announcement comes against the backdrop of tariffs imposed on China and potentially other nations, including Mexico.
Apple CEO Tim Cook met with U.S. President Donald Trump last week, and Trump discussed the move by Apple in a press conference, several days before Apple made official.
Trump told a group of U.S. governors that Apple was planning to “build here instead because they don’t want to pay the tariffs,” reported Yahoo.
Apple confirmed the news on Monday with its own release, touting the company’s largest ever spending commitment.
“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,” Tim Cook, Apple CEO, said. “From doubling our Advanced Manufacturing Fund, to building advanced technology in Texas, we’re thrilled to expand our support for American manufacturing. And we’ll keep working with people and companies across this country to help write an extraordinary new chapter in the history of American innovation.”
New server facility in Houston
Part of the spending will go toward the construction of a new advanced manufacturing facility in Houston to produce servers that support Apple Intelligence, Apple’s AI system.
Previously, the servers were built outside the U.S. The 250,000-square-foot server manufacturing facility in Houston is slated to open in 2026. The servers will power Apple Intelligence and create thousands of jobs.
Further, Apple will put some of the investment toward expanding data center capacity in North Carolina, Iowa, Oregon, Arizona, and Nevada.
In addition, Apple plans to double the size of its U.S. Advanced Manufacturing Fund to $10 billion. That includes a multibillion-dollar commitment to produce advanced silicon at Tiawan Semiconductor’s Fab 21 facility in Arizona. Apple is Taiwan Semiconductor’s largest customer at this facility. Currently, the fund supports projects in 13 states.
In addition, Apple will boost its research and development (R&D) spending, which has nearly doubled in the U.S. over the past five years.
Also, the tech giant plans to open the Apple Manufacturing Academy in Detroit. At this facility, Apple engineers and experts from top universities will consult with small- and medium-sized businesses on implementing AI and smart manufacturing techniques. The academy will also feature free in-person and online courses.
Through these investments, Apple plans to hire 20,000 workers over the four years, with the vast majority focused on R&D, silicon engineering, software development, and AI and machine learning.
Is it realistic?
The news didn’t move the needle all that much as the stock price only went up about 1%. In fact, some Wall Street analysts were skeptical about the ability to execute on the full commitment.
“While the headline figure on the surface is a large number, we believe it lacks substance at this juncture based on history,” wrote UBS analyst David Vogt in a research note, reported Benzinga.
Among his concerns, the analyst was skeptical about the source of funding for what amounts to an additional $125 billion annual investment.
“it’s unclear where the cash flow comes [from] to try to even remotely attempt this,” Vogt said, reported Benzinga. Vogt called the $500 billion investment “completely unrealistic mechanically.”
In other news, Apple shareholders voted down a proposal Tuesday to end the company’s DEI program.
