Nestled in Apple Inc.'s Q3 2015 earnings report Tuesday was news that Cupertino’s cash reserves now sit at a whopping $203 billion, making it the world's richest company. It’s a war chest that leaves Apple pretty much immune to any business slumps, but it can’t simply sit on the hoard waiting for a rainy day – activist shareholders and investors want to see their holdings increase in value. It’s up to CEO Tim Cook and Chief Financial Officer Luca Maestri to find the most efficient use for Apple’s capital, and some of the options are tantalizing.

In healthier economic times, when central banks around the world weren’t killing the fixed income markets with quantitative easing programs, Apple simply would have parked a good chunk of its cash in government bonds and commercial paper for steady, predictable returns. But with yields at historic lows, cash-rich companies need to manage their investments more actively and aggressively.

A stock buyback may help calm investor concerns. Carl Icahn has been famously pushing Apple to expand its stock buyback program, which it did last quarter. The company announced a $200 billion capital return plan, under which Apple announced plans to repurchase $140 billion worth of shares. "We believe the $200 billion buyback/dividend plan announced last quarter was a major step in the right direction," said Daniel Ives, managing director and senior analyst at FBR Capital Markets.

Stock buybacks reduce the number of shares on the market, meaning outstanding shares increase in value. It’s a tactic that’s been used frequently by growth-challenged tech giants like IBM to goose their stock price. But it’s hardly the most efficient use of capital, and Apple, unlike Big Blue, is enjoying robust growth, with revenue up 33 percent and earnings up 45 percent in the last quarter.

Some analysts believe a more effective use of the money would be for Apple to increase its investment in research and development. In the past quarter, Apple spent more than $2 billion on R&D for the first time. "The focus on that cash in our opinion should be around funding new growth frontiers in cloud, wearables, streaming as well as innovations in its bread-and-butter iPhone franchise," said Ives. Apple also reportedly is working on a car. Getting into the automobile manufacturing business would require huge upfront investments that would cut deeply into Apple’s cash reserves.

But R&D can be costly, with no guaranteed payoff. Buying another company that has tested, ready-to-go research could be an option. Apple could make a startup acquisition. The company has done a number of deals in the past to augment its current product lines, like the $356 million purchase of AuthenTec. The acquisition led to the iPhone 5s' fingerprint scanner, an example of how M&As can augment existing products. "We see a more active merger and acquisition strategy on the horizon for Cook and company to further beef up its golden product suite," said Ives.

Apple for now is focused on a few categories of core products: iPhone, iPad and Mac. Enhancing the value of these offerings by incorporating new technologies could drive further growth at a time when iPhone sales, despite seeing 35 percent growth last quarter, failed to meet Wall Street’s sky-high expectations.

Creative Strategies President Tim Bajarin says Apple may have bigger ambitions, and could use its cash reserves to fund new product lines. With rumors going around about Apple launching a TV service, enhancing its watch further, and even developing a car, Bajarin believes the company is aiming for a major acquisition that will seriously expand it into new territory. "Any acquisition would have to be strategic, and from day one, it would have to have capital growth tied to it," Bajarin said.

It's a sentiment that Gene Munster, Apple analyst at Piper Jaffray, supports. In an interview with Bloomberg Radio, Munster said Apple should consider buying Tesla. "To me, when you think about that absurd amount of cash, you have to go after opportunities," he said in the interview. "And I think automotive fits within that camp."

Buying Tesla, or making a similar major acquisition, would make a big statement that Tim Cook wants to take Apple well beyond computers and gadgets. Overnight, the company's product range would expand beyond anything it currently offers, bringing it into uncharted territory. 

But big investments carry big risk. Apple just launched a whole new product category with the Apple Watch – and the jury is still out as the company refuses to divulge sales numbers. With a record-breaking quarter under its belt, Apple may be content with improving its current product range to keep customers happy -- but investors will likely want more.