Apple Inc (NASDAQ:AAPL) quite possibly the most-watched quarterly report of this earnings season. Could Apple stock overcome the end of iPhone mania and handle a headwind in China? Or, would more unexpected bad news rekindle the downtrend that got started in October when Tim Cook & Co. announced it would no longer report iPhone unit sales?

It was the former, as it turns out. Shares of AAPL jumped on the heels of Tuesday afternoon’s encouraging fiscal first-quarter results, firming up a budding turnaround effort that got started in mid-January. Wedbush analysts Daniel Ives and Strecker Backe note that Apple stock has an “Everest-like climb” ahead of it, but maintain an “Outperform” rating and $200 price target.

However, investors are believers again despite the so-so outlook for the quarter currently underway.

There’s a curious detail in last quarter’s accounting statements, however, that’s gone largely unnoticed in the midst of the renewed debates over the importance of the iPhone. That is, Apple once again added to its war chest of cash, and has amassed a (fairly) liquid fortune every other organization can only dream of.

There’s one way the company should seriously consider spending its cash on hand …

Apple’s Cash on Hand

Just how much cash does Apple have on hand? Per the company’s quarterly filing, CEO Tim Cook and his team now have a whopping $44.7 billion in the bank and another $41.6 billion worth of marketable securities that could be quickly turned into cash.

That’s not the whole picture, though. Excluded from those figures is the money Apple has earned overseas and kept there. Despite a much friendlier repatriation tax rate on those funds now, the consumer-tech giant is still sitting on a huge stash of overseas funds.

All told, the Apple cash on hand figure now stands at a stunning $245 billion, with (reportedly) plans to bring much of it back into the U.S. over the course of the next few years.

It’s a ridiculous amount of money. Most companies — not even the ones in the S&P 500 — sport market capitalizations of that magnitude. In total, only 16 organizations surpass that figure in terms of capitalization. If repatriation taxes and other ancillary costs weren’t an issue, Apple could afford to outright acquire giants like Wells Fargo (NYSE:WFC), Pfizer (NYSE:PFE), Procter & Gamble (NYSE:PG), or any of the other thousands of organizations with lesser valuations.

The world is Apple’s oyster, so to speak. It can buy almost anything, or any entity, it wants.

So how exactly should those Apple cash reserves be deployed? The answer lies in where the bulk of last year’s deal-making was done … at the intersection of technology and entertainment.

Where Apple Should Spend Its Cash

It’s a difficult question to answer simply because such fortuitous circumstances are rarely seen. But, given the iPhone slowdown, the advent of services as a standalone profit center — and the ongoing blurring of the lines that have historically differentiated technology, the media and the entertainment industries — a handful of ideas come to mind …

Chief among them is the acquisition of Walt Disney (NYSE:DIS), which is en route to integrating with Twenty-First Century Fox (NASDAQ:FOXA).

It’s an idea that’s been circulating for years, but it has been largely dismissed. The two companies have done well driving in their own proverbial lanes, and melding them had the potential to do more damage than harm.

The idea certainly makes more sense now than it has in the past. AT&T (NYSE:T) now owns Time Warner, and Amazon.com (NASDAQ:AMZN) is a serious video entertainment venue, via Prime. Apple, in fact, has turned up the heat on its home-grown entertainment business, reportedly spending more than $1 billion over the course of the past few months to bring all-new content to consumers sometime this year.

Apple is still behind the video and film eight ball, though, and it may struggle to catch up with competitors on its own. Dealmaking will be the only way it can catch up. Such a deal would most definitely push Apple Inc. toward its goal of becoming a services-oriented outfit. Buying Disney would be more than enough of a draw to pull consumers into the Apple ecosystem.

Or if not Disney, Netflix (NASDAQ:NFLX) …

The on-demand streaming giant is still bleeding money, but Apple could easily absorb it after scooping up Netflix for even a hefty premium above its current market cap of $145 billion. Better still, Netflix’s existing user base of 148 million are already accustomed to paying subscription fees. Selling them another digital product or service wouldn’t be a huge hurdle to clear.

A video play is also the lowest-risk path of all the acquisitions that have been suggested.

Bottom Line for Apple

While Apple’s cash on hand of a quarter of a trillion dollars is arguably best utilized by securing entertainment-related assets — even without knowing exactly how they might be utilized — it’s not apt to happen. AAPL has generally been more interested in more direct rewards to shareholders, like dividends and stock buybacks.

Even the most supportive of shareholders, however, are starting to see there’s more value in doing something else with its cash reserves. After a couple more quarters of waning iPhone business and/or the eventual significant year-over-year slowdown in services revenue, a media-type deal will be much more likely.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.