Buffett once said,Cash is oxygen.

Judging from historical data, US stock tech giants are the main players holding huge cash flows.

In the second quarter, the top six US tech giants$Apple (AAPL.US)$,$Alphabet-A (GOOGL.US)$,$Microsoft (MSFT.US)$,$Amazon (AMZN.US)$,$Meta Platforms (META.US)$with$Netflix (NFLX.US)$Not only is the market capitalization rising steadily, but the amount of cash reserves it holds is also unprecedented.

According to data for the latest reporting quarter, Apple's cash, cash equivalents, and short-term investments reached 166.543 billion US dollars; Google has more than 118.332 billion US dollars; and Microsoft ranked third with reserves of 111,262 billion US dollars.

If you look closely at the financial reports of these tech giants, you'll find that the three major reporting orders of US listed companies are usually profit statements, balance sheets, and cash flow statements.

However, the order of Amazon's three major statements has always been the cash flow statement, profit statement, and balance sheet.Because Amazon believes that neither the income statement nor the balance sheet can honestly reflect its business situation, only the cash flow statement can honestly reflect its operating performance, so Amazon wants investors to evaluate the investment value of its stocks from the perspective of cash flow.

So why is a statement of cash flow so important?

The cash flow statement is the inflow and outflow of an enterprise's cash during a fiscal year. If you compare the company's cash to a pool, then the water flowing into and out of the pool can be compared to the company's cash flow. If the inflow is greater than the outflow, it proves that the company's ability to make money is stronger than its ability to spend money; conversely, the company's ability to make money is not as good as its ability to spend money.

Cash flow is generally divided into three categories:

Operating cash flow:It refers to the cash flow generated from business activities.

Investment cash flow:It refers to the cash flow generated from the investment activities of an enterprise.

Financing cash flow:It refers to the cash flow brought about by corporate financing activities; the issuance of shares and claims is the financing cash flow, and the repurchase of stocks and repayment of principal liabilities is the financial outflow.

To analyze the cash flow statement, one indicator that needs to be focused on isNet cash flowThis indicator is often compared with the net profit in the income statement. Because net profit is affected by factors such as accounts receivable, depreciation and amortization, etc., it cannot reflect the actual situation of corporate capital, and net cash flow reflects real money.

Futu Information has broken down the cash flow statements of the six major tech giants. Overall, the cash flow of these tech giants is in a healthy state.

It is worth noting that Meta is a rare giant that is still expanding rapidly.Cash at the end of the quarter increased 140% year on year to US$29.804 billion; net cash from operating activities increased 41.92% year on year to US$17.309 billion; net cash from investment activity increased 25.23% year on year to US$-5203 billion; net cash from financing activities surged 180.63% year on year to US$5.292 billion.

Furthermore, the reason why Apple has generated more cash outflows from financing activities than other tech giants is —Apple's shareholders returned a total of $21.327 billion in cash this quarter, including $3,849 billion for dividends and $17.478 billion for share repurchases.

Unlike Apple, which uses cash to buy back stocks,Most of Microsoft's cash reserves have been used to invest in acquisitions.For example, it was previously announced that an investment of 10 billion US dollars in OpenAI will also be required to acquire Activision Blizzard for 68.7 billion US dollars. It can be said that all of these can be paid with cash reserves.

However, generally speaking, a certain amount of cash reserves plays a stable role in business operations, and also brings greater opportunities to oneself during periods such as the economic downturn, so you can make some investments and acquisitions.

Editor/Somer