Warren Buffett’s Berkshire Hathaway has made a big bet on Apple. The company has invested $71.5 billion in the tech giant. This makes up about 24% of Berkshire’s $303 billion portfolio.
Buffett first bought Apple shares in 2016. Since then, the stock has gone up by 797%. Buffett liked Apple because it is a high-quality business with a strong brand.
Apple is known for making innovative and user-friendly products. It can raise prices without losing customers. This shows it has strong pricing power, which is a sign of a great business.
Apple’s services like iCloud, Music, and TV+ have also become important for making money. The combination of Apple’s hardware and software creates a powerful system. This makes users loyal and likely to buy again.
In 2015, Apple was already doing well financially. It had a 23% profit margin and made a lot of cash.
Buffett’s significant Apple investment
This likely made Berkshire feel the investment was less risky. But in 2024, Berkshire started reducing its stake in Apple. It sold about two-thirds of its shares over the year.
This may be because Apple’s stock price has gotten very high compared to its earnings. Analysts expect Apple’s earnings to grow about 11% per year over the next three years. This may not be enough to justify the high stock price.
There are also concerns that the iPhone market is getting saturated. In early 2025, iPhone sales were down from the previous year. They missed expectations, especially in China.
Apple is still Buffett’s biggest investment. But investors should be cautious about buying Apple stock at its current high price. It might be better to wait for a pullback.
Overall, Apple’s products and brand remain strong. But the high stock valuation and slowing growth mean investors should think carefully before following Buffett’s lead.
