Thoughtful, detailed coverage of the Mac, iPhone, and iPad, plus the TidBITS Content Network for Apple consultants.

Warren Buffett Invests $1 Billion in Apple

After Apple’s first year-over-year quarterly revenue decline in 13 years, some on Wall Street soured on the company’s stock, but one big-name investor is betting heavily on Apple. Warren Buffett’s Berkshire Hathaway firm invested over $1 billion in Apple earlier in 2016. Berkshire Hathaway is famously conservative in its investments, and rarely ventures into the tech sector, so its backing is a vote of confidence in Apple during an uncertain time. News of Berkshire Hathaway’s stake in the company caused an immediate 3.7 percent increase in Apple’s stock price.favicon follow link

 

Comments about Warren Buffett Invests $1 Billion in Apple
(Comments are closed.)

Peter Meyer  2016-05-18 18:34
Josh, If you look at Berkshire, there are two nuances to consider. One is that Buffet may not have made this choice. His top people seem to have made it, and they have autonomy. So it was not Buffet but Berkshire.

What does Apple have in common with many other Berkshire choices? The power to price. You may remember that Buffet said: "the single-most important decision in evaluating (the health and potential of) a business is pricing power. If you've got the power to raise prices without losing business to a competitor, you've got a very good business."

This perspective is technology agnostic. What it endorses is Cook and his management team. That is a very interesting position to explore. It may be that Berkshire does not care about the presumed car, but does care a lot about the ability to hold prices on iPhones even if revenue declines.

This might be my own bias, projected onto the Bershire team, but I think it is worth a few words.

Thanks!

Peter
NaplesJerry  2016-05-18 19:24
Yes. The financial reviews said the investments in Apple were done by two heir appear to and Warren Buffett did not review or approve or disapprove of them
Josh Centers  An apple icon for a TidBITS Staffer 2016-05-18 20:52
Thanks, I edited to make Buffett less prominent. Oh, I absolutely think this is an endorsement of Apple's leadership, which I indicated in the post.