Apple Stock Accounts for 43% of Buffett’s Berkshire Hathaway’s portfolio
Apple stock price underperformed over the last couple of months compared to other FAANG stocks. Its price jumped only 23% in the last six months, but still, the rally is strong enough to push Buffett’s Berkshire Hathaway’s investment to $91B, accounting for 43% of Berkshire’s portfolio.
The firm claims that they are not viewing Apple as a stock. They are considering it as their third business, adding that Apple is probably the best business we know in the world.
Apple stock price rebounded sharply after bottoming around $200 level in March. Its shares are up more than 80% in the last twelve months and shares grew almost 200% in the past five years.
The future fundamentals of the world’s largest tech company appear strong amid its strategy of diversifying the revenue base. Previously, Apple’s revenue generation was only dependent on iPhone revenue. The company has now expanded its revenue base by investing in several other areas.
Its services segment has generated record revenue of $13bn in the last latest quarter while revenue from wearables, home, and accessories came in at $6bn. The robust iPod and Mac sales growth have also been adding to its overall revenue growth.
The company is likely to experience slower revenue and earnings growth for the June quarter due to lockdowns. Despite that, its future fundamentals appear strong.
Deutsche Bank analyst Jeriel Ong said,
“There are high prospects of a V-shaped recovery in $AAPL sales, App Store revenue strength, and a firming iPhone 12 outlook despite the potential release delay.”
The bank has provided a price target of $400. Apple stock price is currently trading at a record of $380. Apple has also been offering dividends and share buybacks to investors.