• bonds
  • deposits
  • liquidity
  • money market funds

Tech giants boost cash holdings to record high

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Cash holdings at Apple, Microsoft, Google, Amazon and Facebook increased to a five-year high.

by Nicholas Dunbar and Manpreet Singh

Published: 17 February 2020

The five largest US companies by market capitalisation have increased cash and cash equivalent holdings to a total of $122 billion at the end of 2019, according to an analysis of disclosures by EuroFinance. Facebook and Amazon contributed the most, increasing cash holdings by $9 billion and $4.3 billion respectively. Cash and cash equivalent graph

Highlighting the continuing importance of bank relationships for treasury cash management, the majority of the new cash was in the form of deposits, in contrast to the previous quarter when money market funds dominated.

Meanwhile, the total bond investments at the big five declined to $448 billion, pulled down by a $32 billion reduction of securities investments at Apple. From their 2017 peak, Apple‘s bond holdings have fallen by $90 billion, while the other four companies collectively added $16 billion of bonds.

From the period 2017 to 2019, Amazon and Facebook had the largest growth in cash and bond investments. They grew by 77% and 31% respectively. The top five companies in 2017 held $602 billion of cash and marketable securities which has come down to $570 billion at the end of 2019.Marketable security graph

Since 2017, the cumulative investments in corporate bonds and government bonds of top five companies have come down from $483 billion to $418 billion. While the investments in money market funds and deposits have gone up from $34 billion to $64 billion.

The share of corporate bonds and government bonds in total investments held by the top five companies in 2019 was 50% and 30% respectively.

Since 2014, the average annual growth rate of cash and marketable securities holdings of the Apple, Amazon, Alphabet, Microsoft and Facebook have been 4.3%, 26%, 13%, 9% and 40% respectively. Facebook and Amazon had the highest average annual growth rate since 2014 among the top five companies. In the case of cash holding the average annual growth rate was the highest in Facebook with 40% while in marketable securities holdings it was Amazon with 51%.

The share of cash investment in total holdings by top five companies has gone up from 17% in 2014 to 21.4% in 2019 whereas marketable securities investment come down from 83% to 79%.