Even though Warren Buffett has avoided investing in technology companies through his career, his bet on Apple could end up being one of the best investments in history. As Apple hit a $3 trillion market valuation this week, Buffett’s investment on the tech giant stood at more than $120 billion on paper.

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Buffett’s Berkshire Hathaway acquired 887 million shares or 5.4 percent stake in Apple between 2016 and 2018. The stake cost the conglomerate $36 billion, which was worth $160 billion on Monday when the iPhone maker hit the $3 trillion milestone.

The investor would have made more if Berkshire Hathaway had not sold about 12 percent of its holding for around $13 billion earlier.

During the Berkshire annual meeting in May, Buffett had said it was "probably a mistake" to trim the holding, adding that Charlie Munger, his business partner, had advised him against it.

Apart from the giant appreciation in share price, Buffett’s Berkshire has earned regular dividends, averaging about $775 million annually, from the tech giant.

“Without a doubt, it is one of the strongest investments that Berkshire has made in the last decade,” CNBC quoted James Shanahan, Berkshire analyst at Edward Jones, as saying.

Buffett, who has stayed away from high-flying tech stocks, warmed up to the sector in the last 10 years with a push from Berkshire’s investment managers Todd Combs and Ted Weschler. According to InsiderScore.com, the Apple stake makes up over 40 percent of Berkshire’s equity portfolio at present, making it the tech giant’s largest shareholder, apart from index and exchange-traded fund providers.

Buffett, who once described the iPhone as a “sticky product”, now believes the Apple share could be the third largest business of the company after investment in insurance and railroad sectors.

“I don’t think of Apple as a stock. I think of it as our third business,” the 91-year-old investor had told CNBC in 2020.

When other businesses such as energy and insurance took a huge hit on the back of the COVID-19 pandemic in 2020, it was the Apple investment that helped the conglomerate weather the crisis, CNBC reported.

(Edited by : Anshul)

First Published:Jan 5, 2022 4:49 PM IST