Why Apple shares remain Warren Buffett's favourite investment?

All eyes are on Apple’s annual event as the company is expected to unveil its first-ever foldable iPhone. While Apple shareholders will keenly watch how the stock reacts after the launch, the stock remains legendary investor Warren Buffett's favourite.

Buffett first bought Apple shares in 2016, and it has grown into Berkshire's single biggest position. It accounts for nearly 22% of the conglomerate's roughly $263 billion equity portfolio. Berkshire invested about $35 billion in Apple during the period between 2016 and 2018. That $35 billion investment then rapidly surged to around $185 billion before tax, including dividends and gains, Buffett was quoted by Business Insider as saying. "And I didn't have to do a damn thing," he added.

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In an interview earlier this year, Buffett said he sold Apple too soon and would buy more of it, though not at the ongoing market price then. “I sold it too soon. But I bought it even sooner,” he told CNBC. Warren Buffett once joked that Apple’s outgoing CEO Tim Cook made more money for Berkshire Hathaway’s shareholders than he ever did as CEO of the iPhone-maker. While Buffett sold a major chunk of Berkshire’s Apple holding, it still constitutes the company’s largest holding.

Peter Lynch’s regret is not buying Apple shares

Veteran American investor Peter Lynch in 2023 revealed that he wished he had not missed out on the explosive growth opportunity in iPhone maker Apple. "Apple was not that hard to understand. I mean, how dumb was I?" he told CNBC, adding that the iPhone maker had a nice balance sheet as well.

Lynch noted during his interview that he should have done some work on Apple, as it was not a complicated company. He recounted that his daughter had bought an iPod for $250 at the time and he recalled thinking Apple was making a high margin on it. Yet he didn't buy the stock, leaving him with regret later in life.

Also read | How dumb I was! When Peter Lynch regretted not buying Warren Buffett's favourite stock whose product his daughter used

Apple’s first foldable iPhone

In what would mark the first Apple event since new CEO John Ternus took charge, the company is all set to unveil its next-generation iPhones today. While Apple itself has not confirmed it yet, reports and media leaks suggest that the company will likely unveil the first-ever foldable iPhone after years of waiting.

The foldable iPhone is expected to cost around $2,000-2,500, and would likely fold open like a passport, reports said. "Even with a $2,500 price tag, the Apple foldable is going to fly off the shelves, especially because Apple is excellent at creating an aura of exclusivity, luxury, and scarcity," Nabila Popal, senior research director at IDC, told Reuters.
The analyst expects the new phone to generate more than $45 billion in revenue for Apple by the end of next year, even as foldables overall remain a single-digit share of the phone market.

Also read | The foldable iPhone as Apple turns the page: John Ternus faces his first big test as CEO

Disclosure: "This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The EconomicTimes Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment."