Warren Buffett calls Apple a valuable Berkshire holding in letter to investors

Warren Buffett of Berkshire Hathaway has called Apple’s stock one of the most valuable holdings of his company. Berkshire Hathaway was famously late to investing in Apple, but now owns almost $120 billion worth of the company stocks, which is currently 5.4% of the tech giant.

Apple currently has a market cap of more than $2 trillion and is the most valuable company in the world. Warren Buffett’s holding company had invested $31.1 billion back in 2016, and that stock has grown over time to $120 billion in value. Warren Buffett considers this investment as one of the most valuable assets of his company, on par with his American railroad purchase in 2010.

Warren Buffett’s Berkshire owns 5.4% of Apple stocks

In his annual letter to investors, Warren Buffett outlined Berkshire’s investment in Apple:

Berkshire’s investment in Apple vividly illustrates the power of repurchases. We began buying Apple stock late in 2016 and by early July 2018, owned slightly more than one billion Apple shares (split-adjusted). Saying that, I’m referencing the investment held in Berkshire’s general account and am excluding a very small and separately-managed holding of Apple shares that was subsequently sold. When we finished our purchases in mid-2018, Berkshire’s general account owned 5.2% of Apple.

Warren Buffet’s letter goes on to state how Berkshire’s increase in APPL stock has been costless to the company because Apple has been repurchasing its shares over time.

Despite that sale – 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.

Buffett’s letter explains how Apple’s continuous repurchase of its shares means that Berkshire Hathaway’s ownership in Apple will also continue to increase.

This agreeable dynamic continues. Berkshire has repurchased more shares since yearend and is likely to further reduce its share count in the future. Apple has publicly stated an intention to repurchase its shares as well. As these reductions occur, Berkshire shareholders will not only own a greater interest in our insurance group and in BNSF and BHE, but will also find their indirect ownership of Apple increasing as well.

For an investor that used to avoid investing in tech, owning 5.4% of the world’s biggest tech company was a major change. So far, Warren Buffett’s investment in Apple has proven to be on point. Since 2016, Apple’s market cap has increased from around $600 million to more than $2 trillion in 2021.