Apple Share Buybacks Fuel 12-Fold Stock Price Surge Under Tim Cook

Tim Cook's tenure as CEO of Apple has come to an end after 15 years, leaving behind a legacy that significantly impacted shareholder returns. Under his leadership, Apple began buying back its own stock in 2012, a decision that would have far-reaching consequences for the company and its investors.

The total number of shares outstanding dropped by more than 44% since the start of this program, with each share now having an 80% bigger stake in Apple's business than it did in 2012. This reduction in shares has contributed to a substantial increase in earnings per share, which grew over 5.5 times during Cook's tenure.

Apple's net income also soared, rising from just above $41 billion in 2012 to nearly $129 billion in the trailing 12 months. The stock returns have been even more impressive, with prices increasing by nearly 12-fold since the start of fiscal 2013 due to a significant expansion of Apple's earnings multiple.

The company's valuation has expanded from being valued between 10 and 18 times trailing earnings during most of the 2010s to currently sitting at a trailing P/E ratio of 37.5. This is supported by Apple's consistent free cash flow, which has allowed it to sustain massive share repurchases for years to come.

With Tim Cook leaving behind a company capable of deploying billions to expand existing products and develop new ones, his successor, John Ternus, takes over Apple in an excellent position. The company still produces very strong earnings and returns tens of billions of dollars to shareholders every quarter.