Berkshire Hathaway started purchasing Apple stock in 2016,
and by mid-2018, the conglomerate had amassed 5% of the company — a stake that
cost $36 billion. In 2022, that Apple investment is worth a whopping $160
billion. The iPhone maker also rewards its investors with dividends, and
Berkshire has received regular payouts averaging $775 million per year.
Despite Apple's clear and sustained growth, investing in
Steve Jobs's brainchild wasn't always on Buffett's radar; historically, the
"Oracle of Omaha" has been wary of heavy-hitting tech stocks, but
that's changed in recent years. Today, Berkshire's Apple stake comprises more
than 40% of its equity portfolio, per InsiderScore.com calculations, and
Buffett has referred to the company as one of Berkshire's largest businesses,
third only to its insurance and railroad interests.
Buffett has called the iPhone a "sticky" product,
one that keeps consumers coming back on a consistent basis. "[Apple is]
probably the best business I know in the world," Buffett said in a CNBC
interview in February 2020. "I don’t think of Apple as a stock. I think of
it as our third business."
Buffett often says that appreciating shares can fluctuate
further and therefore aren't yet real gains, but Berkshire has realized some of
its Apple-investment profit; in 2020, the conglomerate sold off some of its
holdings and came away with $11 billion.
But Apple's continuous buybacks have sustained its healthy
growth and increased Berkshire's total stake in the company. “Berkshire’s investment in Apple vividly
illustrates the power of repurchases,” the conglomerate said in its 2020 annualreport. “Despite that sale [in 2020] – voila! – Berkshire now owns 5.4% of
Apple. That increase was costless to us, coming about because Apple has
continuously repurchased its shares, thereby substantially shrinking the number
it now has outstanding.”
Berkshire's significant investment in Apple also helped the
conglomerate emerge from Covid-19's damaging impact on its insurance- and
energy-business mainstays.
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