Analyst: Apple went on a CapEx spending spree last quarter

The bump in expected capital expenditures during the second half of Apple’s fiscal 2018 is as yet unexplained.

From a note to clients by Wells Fargo’s Aaron Rakers that landed in my inbox last week:

• Apple’s F3Q18 10-Q discloses that the company expects to spend ~$17.0 billion on capital expenditures during F2018. This is an increase from the company’s prior ~$16.0 billion guide.
• Apple reported that it spent ~$11.1 billion on capital expenditures for the first three quarters of F2018 (implying ~$5.3 billion spent during F3Q18).
• Apple’s Machinery, Equipment, & Internal Use Software balance increased by ~$4.28 billion in F3Q18 – a q/q increase that is 55% higher than the avg. F3Q q/q increase seen over the past five years
• Apple’s Land & Buildings balance within PP&E grew to $15.4 billion exiting F3Q18, up 23% from the year ago balance and up ~154% from two years ago as we believe this reflects Apple’s cloud data center investments.

My take: What’s got me scratching my head is the height of the golden bar in Raker’s chart below. CapEx includes spending on product tooling, manufacturing process equipment and infrastructure. What’s Apple gearing up for?
Click to enlarge.