Last week, Cupertino-based giant, Apple Inc (AAPL - Free Report) announced that it will be investing $1.3 billion in setting up a sprawling data center at Waukee, IO.
Iowa has emerged a preferred destination for tech giants, given the extensive tax incentives the state government has been offering. Per reports, Apple will be given nearly $210 million as tax incentives. Apart from Apple, Microsoft (MSFT - Free Report) , Facebook (FB - Free Report) and Alphabet (GOOGL - Free Report) already have data centres located in Iowa.
Reportedly, Apple’s data center will come up on a 2000 acre land in the city of Waukee, located at Dallas County. Construction will begin in 2018 and is expected to conclude by 2020, supporting over 550 jobs. Per reports, once the data center commences operations, it will create about 50 permanent jobs.
Apple has been trying to create more work in the United States and increase its manufacturing foot print in the country.
The company has been subjected to intense scrutiny by President Donald Trump regarding the “manufacturing” issue. Throughout his campaign, Trump had opposed Apple as well as other tech giants’ practice of manufacturing outside the country.
With Trump in the White House, Apple has started to highlight its efforts. Earlier this year, it set up a $1 billion fund to endorse manufacturing jobs in the United States. Investment in Corning is the first one made by Apple from this fund.
At the annual shareholders’ meet in March, Apple had mentioned spending over $50 billion on suppliers toward manufacturing in the United States. CEO Tim Cook further added that Apple has created around two million jobs in the country, including manufacturing ones.
Cook was quoted by media reports saying, “We’re always looking for more ways to help our country. We know that Apple can only exist in the U.S.” He added that nearly 70% of the company’s workforce is in the United States.
Per media reports, Iowa is known for being an extremely important state for clean energy apart from lending extensive tax incentives. The booming wind power industry in the state is a major draw for tech giants. Reportedly, last year, nearly 37% of the electricity generated from wind power.
Iowa Governor Kim Reynolds was quoted saying, “Apple’s commitment to innovation and renewable energy leadership mirrors our own. This investment in our state is vital as we continue to develop as a technology hub and grow our workforce.”
Earlier this year, Apple issued a new $1 billion Green Bond to ramp up its renewable energy and environmental efforts. Notably, the company’s second Green Bond issuance came on the heels of Trump’s decision to withdraw the United States from the Paris climate agreement, thereby weakening initiatives to combat global warming.
Additionally, Apple will be creating a $100 million Public Improvement Fund committed to Waukee for infrastructure and community development.
Zacks Rank and Share Price Movement
At present, Apple carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Notably, the company has outperformed the industry in a year. Shares of Apple have surged 49.6% compared with the industry’s 48.1% increase.
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