Apple Inc.'s (AAPL) massive cash hoard keeps growing by the quarter.
In its second-quarter earnings, Apple reported that it now has $261.5 billion in cash, with 94% of that (or roughly $245 billion) being held overseas. That's a 4% increase from the $256.8 billion in cash it held during the first quarter.
Editor's note: This article was originally published by The Deal, a sister publication of TheStreet that offers sophisticated insight and analysis on all types of deals, from inception to integration. Click here for a free trial.
Apple may be awaiting the possibility of a future tax holiday as an impetus to put its cash to work. President Donald Trump has indicated he supports some form of tax repatriation in the near term, which would allow companies to repatriate their cash back to U.S. soil at a tax rate of 10% instead of the usual 35%. In the event of a one-time tax holiday, analysts say Apple would be likely to issue stock buybacks or increase its dividend to reward shareholders.
Others envision more exciting possibilities, however. The tech giant could consider some M&A as a means of building value in its overall business while boosting its stock.
The rumor mill seems to churn out new acquisition targets by the day, but several names have stuck around, including Disney (DIS) , Netflix Inc. (NFLX) and Tesla Motors (TSLA) , among others. The disbelievers argue that such deals would require massive offers and would also break from Apple's usual acquisition strategy. To date, Apple's largest deal is its $3 billion purchase of Beats Electronics in 2014, while these other companies sport market caps many many times as large.
A Disney deal would allow Apple to live out its rumored ambitions of building an internet-based video service, said Chris Tsai, president and chief investment officer of investment management firm Tsai Capital. Disney might be interested because Apple could serve as a distribution pipeline to the iPhone, which is becoming one of the most popular screens on which to consume content. Disney's management team also has deep expertise within many areas of media, which would help Apple as it dives more into original content creation.
Apple has only made 88 deals total over the span of the company's 41-year history, according to Crunchbase. The tech giant tends to make bolt-on acquisitions in emerging tech areas that it hopes to venture into. The company's latest deal for German eye-tracking firm SensoMotoric Instruments is expected to help speed up its work in augmented reality, for example.
"I think it would be more of a tuck-in mentality vs. a splashy acquisition," said FBN Securities analyst Shebly Seyrafi. "Simply look at virtual reality and self-driving cars, and see which companies have interesting tech that Apple could leverage."
More of What's Trending on TheStreet: