Every once in a while, we hear rumors about Apple planning to make a significant acquisition, such as Disney, Netflix, Tesla, or even Peloton. While some of these companies might welcome the opportunity to join the most valuable firm in the world, Apple’s last major acquisition was Beats, nearly a decade ago, for $3 billion. But what do Apple investors think about this conservative approach, and why doesn’t the company utilize some of its $165 billion cash hoard? Here, we discuss some possible explanations.

A cautious approach to mergers and acquisitions

First and foremost, Apple tends to avoid large purchases that could trigger antitrust allegations. Consider what might happen if the company acquired Spotify, Sonos, or Peloton. Such a move would likely place the Cupertino-based giant under regulatory scrutiny, as has occurred with Amazon and Microsoft. Microsoft, for example, is currently working to finalize its $69 billion Activision Blizzard deal, which regulators and governments perceive as a potential threat to competition in the video game industry.

While these companies may view massive deals as the better approach, Apple opts for smaller startup acquisitions to bolster its homegrown push into new markets. The Cupertino firm also prefers to return much of its excess cash to shareholders through share buybacks and dividends, as reported by Bloomberg.

“Not doing a big deal hasn’t impacted them, and if it ain’t broke, don’t fix it,” Gregg Abella, CEO of Investment Partners Asset Management, which holds the stock, told Bloomberg. “I’m pleased that Apple has a lot of discipline in this regard.”

Logan Purk, an Edward Jones analyst, shares the same perspective: “If Apple tried to do some massive deal that was outside of its wheelhouse — not complementary, really changing its story — that would make me worried. It would be so outside its normal course of action that you would have to ask why.”

Is Apple done with big acquisitions?

Given the ongoing scrutiny surrounding its App Store, it seems unlikely that Apple would risk a major merger that could exacerbate regulatory issues. However, if the right opportunity presents itself, it’s hard to say Apple wouldn’t seize it. But the company’s track record over the past few years indicates a preference for smaller acquisitions rather than engaging with larger players.