Warren Buffett‘s investment in Apple is becoming increasingly lucrative, with the technology giant’s stock price surging nearly 50% this year. Buffet’s Berkshire Hathaway now holds a 5.8% stake valued at nearly $180 billion. The investment conglomerate initially purchased the majority of these shares for $31 billion, resulting in an impressive paper profit of nearly six-fold.
The remarkable rally in Apple‘s stock is part of the broader surge in Big Tech stocks, fueled partly by investor enthusiasm for artificial intelligence (AI), which promises enhanced productivity and increased profitability for providers. Google Bard and Microsoft’s Bing Chat bring generative AI to their browsers. Apple will need to do the same with Apple GPT for Safari. Recent rumors of Apple developing its own large language model of AI, or generative AI, caused its stock price to jump.
With Apple being the most valuable holding in Berkshire‘s stock portfolio and Buffett’s company being the largest individual shareholder of Apple, the success of Apple‘s stock has significantly contributed to Berkshire‘s portfolio appreciation. An estimate by UBS analyst Brian Meredith suggests that between April 1 and July 16 this year, 75% of Berkshire‘s gains were attributed to its Apple position, resulting in a 10.1% increase in the portfolio’s value.
Warren Buffett, famous for his long-term investment strategy, remains unfazed by short-term fluctuations in stock prices. Despite the massive size of his Apple investment, which accounts for nearly a quarter of Berkshire‘s $750 billion market capitalization, Buffett defended it earlier this year, asserting that Apple is a “better business than any we own.”
Buffett has lauded Apple‘s focus on excellence in a few key areas, praised CEO Tim Cook‘s exceptional leadership, and emphasized the indispensable nature of products like iPhones and MacBooks to their users. As a seasoned investor, Buffett sees the value in holding onto high-quality businesses for the long term, acknowledging the significance of companies like Apple in his investment portfolio.
