Many Muslims are curious whether investing in Apple stock (AAPL) is halal or haram in view of Islamic law or Shariah. This confusion stems from the fact that riba (interest) is prohibited in Islam, and many companies like banks deal heavily in interest.
Apple is one of the most popular and valuable companies in the world, known for its innovative products such as the iPhone, iPad, Mac, Apple Watch, and AirPods.
However, does investing in Apple shares comply with the principles and rules of Islamic finance?
Is Apple Stock Halal?
Yes, investing in or buying Apple is Halal according to Islamic Laws. Apple does not deal in haram ways of earning, their stock cannot be classified as outright haram.
Further analysis is required, because stocks can also become haram if the company invests in other haram businesses or earns too much interest income.
What Makes a Stock Haram?
For a stock to be considered haram (forbidden) in Islam, the company’s primary business must involve prohibited activities according to Sharia law. Examples include:
- Companies that profit heavily from interest (riba) and loans
- Gambling and casino operations
- Production and sale of haram products like pork or alcohol
- Pornography and adult entertainment
- Weapons manufacturing
Apple does not deal in these sectors, their stock cannot be classified as outright haram. However, further analysis is required, because stocks can also become haram if the company invests in other haram businesses or earns too much interest income.
Does Apple Deal in Interest?
Apple holds significant cash reserves and investments, which necessarily earn interest income via bonds, savings accounts, etc. However, this interest accounts for a very small percentage of their overall income.
In 2020, Apple reported $5.6 billion of interest income compared to $274.5 billion in net sales. So only about 2% of their net income came from interest. Earning incidental interest income does not make a company haram. Scholars like the eminent Dr. Yusuf DeLorenzo say that less than 5% interest income is acceptable. Apple falls well below this threshold.
Apple does not operate a lending business or charge interest on loans and credit, which are the most severely prohibited riba transactions. The interest earned is incidental and not the main business.
Does Apple Invest in Haram Stocks?
Apple has a huge portfolio of investments worth over $200 billion. This includes bonds, securities, and minority stakes in companies like Disney and Intel. Apple does not disclose all its investments, so it is impossible to rule out that it does not invest in some stocks forbidden in Islam.
Apple’s investment policy outlines that it invests conservatively in ethical, sustainable companies. There is no publicly known evidence that Apple invests in haram sectors. The tiny possibility that undisclosed investments may contain some impermissible income represents only a negligible portion of Apple’s earnings.
What Does Apple Sell?
Apple’s main business is producing and selling consumer electronics like iPhones, Macbooks, iPads, etc. There is nothing haram about electronics and hardware.
Apple also sells software, digital content, and services like Apple Music subscriptions. Music and digital entertainment are halal products. Services like repairs and Apple Care+ warranty are also permissible activities.
Additionally, Apple has taken steps to offer Islamically compliant financing options like deferred payment plans without riba. Overall, Apple’s main sources of income are through permitted channels in Islam.
Verdict on Apple Stock Halal Investing
Based on the above analysis, the vast majority of Apple’s business and investments are halal compliant. There is no clear evidence that Apple stock should be considered haram for Muslims. The most conservative scholars may advise avoiding it, but many prominent Islamic finance experts like Imran Lum of Alquity Investment Management view Apple as Shariah compliant.