Warren Buffett’s Berkshire Hathaway Investment in Apple Leads to $120B Gain

UTC by Oluwapelumi Adejumo · 3 min read
Warren Buffett’s Berkshire Hathaway Investment in Apple Leads to $120B Gain
Photo: Depositphotos

Since the billionaire investor started accumulating stocks from Apple in 2016, there’s been tremendous growth in the value of his investment.

In 2018, Warren Buffett‘s Berkshire Hathaway acquired a 5% stake in Apple Inc (NASDAQ: AAPL) for $36 billion, and now the stake is worth $160 billion as Apple’s market valuation managed to touch $3 trillion.

Berkshire Hathaway’s Apple Stake Triples

Back in 2018, one of the richest men alive, Warren Buffett, decided to splash over $30 billion on a mere 5% stake of the phone-making giant Apple; not many were pleased with the transaction as a lot of experts condemned the deal as extravagant. Today, Buffett’s investment has risen to three times the initial figure on paper. The surge came after Apple recorded a $3 trillion market valuation.

Buffett’s journey in buying Apple stock began in 2016, and before the end of 2018, his Berkshire Hathaway possessed a 5% stake in the iPhone-making company. His investment seems to have paid off a few years later, as it’s now worth $160 billion.

Speaking on the recent development, Berkshire Hathaway’s top analyst James Shanahan agreed that the Apple stake purchased is ultimately one of Berkshire’s best investments within the last decade. Concerning the stock surge, Berkshire Hathaway also benefits immensely from its association with Apple, raking in about $775 million yearly.

Todd Combs and Ted Weschler, both of whom are Buffett’s deputies, are rumored to push behind the billionaire’s interest in Apple. According to InsiderScore.com, Berkshire’s Apple stake now makes up for more than 40% of its equity portfolio, making it Apple’s largest shareholder, outside of index and exchange-traded fund providers.

Since the billionaire investor started accumulating stocks from Apple in 2016, there’s been tremendous growth in the value of his investment. Speaking to CNBC, he called the 5% stake “his third-largest business.” Buffett believes that there’s a tendency for his investment value to swell more than it has because the Apple product, iPhone, is a “sticky” product that binds people to the company.

Over the last few years, Berkshire has been shedding off parts of its stock, making around $11 billion during the pandemic. However, Apple’s repurchase programs have seen Buffett’s company taking over outstanding shares and growing its overall stake.

Berkshire’s 2020 annual report reads:

“Berkshire’s investment in Apple vividly illustrates the power of repurchases. 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.”

In the report, Berkshire confirmed that the repurchase of some of its shares within the period has also led to it indirectly owning around 10% of Apple’s asset and future earnings than it did in 2018.

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Oluwapelumi Adejumo

Oluwapelumi is a believer in the transformative power Bitcoin and Blockchain industry holds. He is interested in sharing knowledge and ideas. When he is not writing, he is looking to meet new people and trying out new things.

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