The latest news to come out of Berkshire Hathaway Inc. recently is that Warren Buffett has bought more shares in Apple in the first quarter of 2018. Berkshire added 75 million shares. Warren Buffett says that the iPhone maker is likely to see gains in the long term since its business model looks great. The company has met all the requirements he looks for in a company. The company is able to maintain its client base while at the same time keeping off competition from other firms. No other company has managed to create products which are similar to Apple’s. With such in mind, Apple then becomes good business for Berkshire investments.
Given the history Warren has had with technology companies, this came as a surprise to many investors. He has always maintained a luke-warm approach to technology companies as he finds the industry too dynamic for long-term returns. Berkshire started investing in this firm in 2016 and in just the short time, Warren has invested heavily in the firm.
At first, he made a small purchase, but in 2017, he made a huge purchase adding 240 million shares. According to Buffett, Apple is making double profits of what other companies are doing. At the time he was buying Apple, he sold international Business Machines Corp. In the first quarter of 2018, Berkshire added 75 million shares. Apple stake in Apple has grown by over 23%. Although Apple is a Silicon Valley product, it has evolved into a consumer company. Berkshire Hathaway has not made any notable investment in the last two years until now that it has invested in Apple.
Warren Buffett decisions to buy Apple has raised confidence in investors that Apple will continue to do well even after the demise of founder Steve Jobs. Some pessimists have argued that it would suffer a decline due to lack of diversification since the death of Jobs.