Warren Buffett said berkshire hathaway Last year's shareholders were apple (AAPL -0.60%) It was “a business as good as any we own.” And he has been putting his money where his mouth is for years.
Apple ranks as Berkshire's largest holding. It accounts for a whopping 44.3% of the company's portfolio. Like many investors, Buffett has made a lot of money investing in big tech companies. Here's how much you would have earned if you invested $10,000 in Apple stock when Warren Buffett first bought it.
Buffett's Apple buying spree
Berkshire first began its position in Apple in the first quarter of 2016. Buffett and his team initially purchased about 39.2 million shares of Apple stock.
The buying continued into the second quarter of 2016. Berkshire increased its stake in Apple by more than 55%. After staying on the sidelines for the next quarter, Buffett ramped things up significantly in the fourth quarter, boosting Berkshire's position in Apple by nearly 277%.
In 2017, Buffett bought up more Apple shares every quarter. By year's end, Berkshire owned nearly 162.6 million shares of the iPhone maker's stock.
Buffett continued to buy more Apple stock through the third quarter of 2018, but put the brakes on the market near the end of the year, reducing his Berkshire position by 1.1%. The legendary investor also sold relatively small amounts of stock in 2019 and 2020.
Buffett returned to buying Apple in 2022, increasing his stake in three of the four quarters that year. He also purchased more shares in the first quarter of 2023. However, Berkshire cut its stake in Apple by just over 1% in the fourth quarter of 2023. Berkshire currently owns approximately 905.6 million shares.
How much is that $10,000 investment in Apple worth now?
Berkshire Hathaway's Apple stock is now worth nearly $164.3 billion. Of course, the conglomerate has invested billions of dollars in stocks over the past eight years. If you had invested his $10,000 in Apple when Buffett first bought it, you would have had much less money, but you would still have enjoyed a huge profit.
It's unclear exactly how much Buffett paid Apple in the first quarter of 2016. However, let's be conservative and assume that Mr. Buffett bought the stock at his $27.39, the highest closing price during the period. (Note: This price is split adjusted. Apple implemented its 4-for-1 stock split on August 28, 2020.)
If you bought $10,000 worth of Apple stock at that price and didn't sell any shares along the way, your investment would be worth nearly $66,250 today. At the stock price's peak in late December 2023, your stock would have been worth just over $71,000.
AAPL data by YCharts.
However, note that this total does not include reinvested dividends. Apple paid a dividend of at least $0.205 (on a split-adjusted basis) every quarter. Had these dividends been reinvested, the total amount would have been even higher.
Looking to the future
Can you grow your initial $10,000 investment in Apple more than 6.6x over the next 8 years? Maybe, but I wouldn't count on it. Two main factors make such a return difficult.
First, Apple's growth rate has slowed considerably. For example, in the company's most recent quarter, sales were up just 2% year-over-year. Apple's services business continues to grow steadily, but product sales continue to account for more than four-fifths of total sales.
Second, Apple's valuation is high right now. The stock trades at 28 times forward P/E. This is an especially steep forward earnings multiple for a company whose revenues aren't growing rapidly.
Apple will probably remain the best company owned by Buffett's Berkshire Hathaway. But it's probably not the best stock in Buffett's portfolio, at least for now.
Keith Speights holds positions at Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.
