This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Who Should Apple Buy?

Stocks in this article: AAPL CSCO EMC DELL HPQ IBM MSFT

CUPERTINO, Calif. ( TheStreet) -- With $46 billion in cash and investments and no apparent plans to pay a dividend, Apple (AAPL) has a war chest that most companies can only dream of. Could Apple boost its presence in the enterprise by buying Cisco (CSCO) , EMC (EMC) or even Dell (DELL)?

" Apple's business model right now is very volatile," Joel Achramowicz, senior vice president of research at investment bank Blaylock Robert Van, told TheStreet. "They are a consumer company and consumer tastes change very fast -- an acquisition may offer them an entry into the enterprise market."

Apple Store China

Compared to other Silicon Valley heavyweights such as IBM (IBM), Hewlett-Packard (HPQ) and Microsoft (MSFT), Apple has done relatively little M&A. Its most notable recent deals include the buying of Quattro Wireless and P.A. Semi.

Now, however, some analysts are calling for Apple to dig a little deeper in enterprise infrastructure and software. "I wouldn't be surprised to see them make a play for a cloud-based company, a middleware company, or a hardware company that would let them play in the enterprise," said Achramowicz. "With this kind of war chest they could make a big, big, play."

Achramowicz also likes Dell, although its market cap of about $24 billion makes it an expensive buy and it would pose a massive integration headache for Apple: " Dell would, all of a sudden, put Apple into the systems business," he said.

"Buying Dell would actually be a very astute investment," explained Charles King, principal analyst at Pund-IT, citing Dell's wealth of assets, business connections and strong Internet presence. "Dell's online sales expertise could provide an interesting counterpoint to Apple's remarkable exposure in the retail channel."

Earlier this year, at Apple's annual shareholder meeting, Steve Jobs said that he prefers holding onto the company's cash hoard for potential acquisitions and "bold" investments. Buying Dell would certainly qualify as a bold investment; King notes a few other buys that could lead Apple into the enterprise market.

"Another option would be pursuing a company with deep exposure in ties to traditional datacenters that also has a very future-focused strategy," he said. "Cisco and EMC come to mind, and the latter's majority position in VMware (VMW) make it especially attractive."

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs