Warren Buffett made $120 billion on Apple’s rise

Warren Buffett’s bet on Apple might be one of his most successful investments, making over $120 billion.

It resulted from the tech giant breaking another record to end a $3 trillion market valuation this week.

Berkshire Hathaway started buying Apple stock six years ago. By mid-2018, the conglomerate earned 5% ownership of Apple, which cost $36 billion. In 2022, as the massive rally extended into the new year, the Apple investment is worth $160 billion.

Berkshire analyst at Edward Jones, James Shanahan, said that it is one of the most robust investments that the company has made in the last decade.

Besides Apple’s tremendous appreciation in share price, it has also been a lucrative bet for Berkshire because of its significant profits. Berkshire enjoyed regular annual rewards, averaging around $776 million.

According to InsiderScore.com calculations, Berkshire’s Apple stake now comprises over 40% of its portfolio. The conglomerate is Apple’s most significant shareholder outside of exchange-traded fund providers.

Overview of Apple’s repurchase program

Buffett earlier said the iPhone is a product that will stick out there, keeping users in the company’s ecosystem.

In February 2020, Buffett said in a CNBC interview that it’s presumably the best business he knows in the world. He added that in his perception, Apple is not just a stock, but as their third business.

Since the beginning of 2018, Berkshire has been cutting its Apple stake slightly. However, Berkshire’s overall stake in the tech company grew. It happened because of Apple’s repurchase programs. In the 2020 annual report, the conglomerate said that Berkshire’s investment in Apple shows the power of repurchases.

Despite that sale in 2020, the company now owns 5.5% of Apple. That increase turned out to be costless because Apple has repurchased its shares. The investment in Apple played a vital role in supporting the conglomerate whether the Covid-19 crisis in 2020 took a huge hit.