Mikey Campbell
Ignoring a chorus of analyst doom and gloom, financial mogul Warren Buffett's Berkshire Hathaway bought 75 million shares of Apple stock in the first quarter of 2018, raising the fund's position to just over 240 million shares.
Buffett revealed the massive purchase to CNBC on Thursday, two days ahead of Berkshire Hathaway's annual shareholders meeting.
"It is an unbelievable company," Buffett said. "If you look at Apple, I think it earns almost twice as much as the second most profitable company in the United States."
Berkshire is due to release its quarterly earnings report on Saturday, where investors will be able to peruse the fund's top 10 largest holdings. Buffett said the enhanced position would be obvious to those following along.
The huge first quarter purchase is thought to bolster the 165.3 million Apple shares Berkshire owned at the end of 2017. If the fund held its position, as the report suggests, the resulting 240.3 million shares were worth about $42.5 billion at the end of trading on Thursday.
Though he initially shied away from tech stocks, Buffett can be considered a convert, at least in the case of Apple. The "Oracle of Omaha" first bought into the company in 2016 with a share purchase worth about $1 billion. He extended that position to 57.4 million shares worth about $6.64 billion at the end of 2016, only to raise Berkshire's stake to 133 million shares a quarter later.
Apple was Berkshire's second-largest holding last year, sitting just behind Wells Fargo. Berkshire's other tech industry bet, IBM, failed to impress, and the fund ultimately dumped 94.5 percent of its holdings in the company late last year.
Buffett has consistently heaped praise on Apple and its "sticky" product offerings, particularly iPhone.
"Apple has an extraordinary consumer franchise," Buffett said in February. "I see how strong that ecosystem is, to an extraordinary degree. You are very, very, very locked in, at least psychologically and mentally, to the product you are using. [iPhone] is a very sticky product."
News of Buffett's big bet on Apple arrives just two days after the Cupertino tech giant posted its best March quarter ever, reporting revenue of $66.1 billion on 52.2 million iPhone sales. Leading up to the earnings report, analysts cast doubt on the company's decision to market a $1,000 smartphone in iPhone X. Critics were silenced when CEO Tim Cook noted — multiple times — during an ensuing earnings conference call that the flagship handset outsold all other iPhone models since its launch in November.
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Charles Martin
Malcolm Owen
William Gallagher
Christine McKee
Wesley Hilliard
24 Comments
Good for Uncle Warren,,,
So Mr. Buffett is the source of those pessimistic iPhone X supply chain rumors...
Meanwhile, earlier today another supplier Skyworks Solutions released lower than expected estimate. And I quote:
"...Analyst Kumar said the guidance was "really not that bad" as investors expected much worse because of soft trends at Apple."
Say what? "Soft trends at Apple"????? Did this guy from Piper Jeffrey sleep through the entire earnings report and call two days ago?
The narrative on the street is that iPhone demand is in sharp decline and X is a miserable failure. That sell side crowd simply refuses to believe in evidence. They just continue their narrative as if Tim Cook conference call were in another universe.
It is good to see Uncle Warren being the ultimate value seeker here and ignoring all the garbage from the sell side.
I'm still working on my first million shares.
Mr. Buffet does his own research when buying stock. I doubt he listens to any of those jackass analysts. Analysts definitely have a beef against Apple. They all think that Amazon should be the top company on Wall Street because they all worship Jeff Bezos and his dreams of building an unbeatable monopoly.
Honestly, how many times has Tim Cook warned analysts not to use supply chain information to predict iPhone sales? Yet those analysts do the same thing each and every financial quarter a couple of weeks before Apple earnings. They're either stubborn or stupid or maybe both. They're always finding something negative they can write in their reports about poor iPhone sales to scare shareholders to toss their stock into the toilet.
"Don't buy Apple. Buy FANG stocks, instead." It's always that same garbage. Those analysts all believe If a company doesn't have double-digit revenue growth then it's not worth buying. It's that greed mentality that's ruining the stock market and costing naive investors millions of dollars in losses. Full panic mode for Apple... disgusting. At least hold Apple for the dividends. It's much better than bank interest.