"We identified a handful of potential M&A targets. Three are media firms: Netflix, Disney and Hulu. Three are video game developers: Activision, Electronic Arts and Take-Two. And, one is an auto maker: Tesla. Each target confers some strategic benefit to Apple," Suva said. He has a buy rating on Apple.
Investors in Apple could see as much as a 20 percent gain from an Apple acquisition of Disney, or 7 percent from a purchase of Tesla or Netflix, Suva said. The iPhone maker could also use part of the cash to increase buybacks, he said in the note, resulting in "a significant 20 percent lift" in the share price.
Attractiveness of acquisition candidates (deal size, probability, impact to Apple shares)
Source: Citi Research
Apple did not immediately respond to a CNBC request for comment. Management said on the earnings call that it was difficult to speculate on what might happen on tax reform.
The Citi report is also not the first time analysts have speculated about the tech giant buying companies like Netflix or Tesla.
Suva's team of analysts found that Netflix was the most logical target after examining five factors: strategic fit, global scale, transaction size, few non-strategic assets and likely impact on Apple's share price.