Warren Buffett's Berkshire Hathaway bought another 75M Apple shares in Q1
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.
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.
Comments
"...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.
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.
https://en.m.wikipedia.org/wiki/Cognitive_dissonance
He’s got a point. But also maybe when you get so big it’s inevitable that you become boring.
I really do feel Apple is STILL king of the castle. Sure they may not be first at everything but they are the ones that push the whole system forward. Those people who are jumping all over Amazon like they are the next big thing, are those that leave their supermodel wife for something new... only to be disappointed in a few years when they get too familiar with them and start asking the same questions all over again and looking for the next big thing.
I do think your, ‘get so big, it’s inevitable’ comment does have merit and does play a role, but perhaps the size has more to do with the inability to keep things secret and the expectation that Apple needs to keep pace with all these other supermodels who are trying bold things just to attempt to make a statement, to stand out, and differentiate themselves as they attempt to break into a nearly impenetrable business market. (Side note - if you are arguement is simply referring to the comparison of the push to get voice assistants in the main stream with the already major players in the system, then ignore this argument.
Apple can still wow - I love my iPhone X and AirPods are getting great reviews. I want more of the wow.
As long as the AirPort ease of use can be certified from Apple to work with third parties I'm good to go. That department never was going to be a steady growth for Apple. The HomePod will be big as the inevitable offspring of a larger bass option, paired satellite smaller units, and improved Siri working across the Smart Home expands.
You'll see spots with pool party entertaining, etc., showing them off.