Apple’s free cash flow could surge under new IRS rules

A new U.S. tax law could give Apple a multibillion-dollar lift in free cash flow, with the effects possibly starting soon.

The One Big Beautiful Bill Act restores full bonus depreciation and immediate R&D expensing for U.S.-based companies. These changes allow Apple to accelerate deductions it previously deferred, mainly from domestic research.

In an investor note seen by AppleInsider, Morgan Stanley estimates Apple could gain $12.2 billion in free cash flow in fiscal 2026. Over four years, the total benefit may top $20 billion.

Since Apple’s fiscal year ends in September, the impact may begin showing up in the current quarter.

Limited long-term effect

The benefit is mostly about timing. GAAP earnings won’t change, and Morgan Stanley advises against treating this as recurring profit.

Still, the extra cash may give Apple more room to fund AI infrastructure, services, or manufacturing shifts. Despite the potential uses, Apple is expected to stick to its usual capital strategy, including large buybacks and modest dividend growth.

Google stands to benefit the most near term, with a projected $25 billion FCF jump in 2025. Microsoft, Meta, and Amazon are also set to gain, though the timing and size vary by company.

The tax changes may lead to revised guidance across big tech. Apple’s update could come as soon as the next quarter.