Advertisement

Warren Buffett's Apple stake just hit $177 billion in value — more than Nike, Disney, or Wells Fargo are worth

warren buffett
Warren Buffett.Kevin Lamarque/Reuters
  • Warren Buffett's Apple wager is now worth $177 billion, or more than Nike, Disney, or Wells Fargo.

  • Apple stock has jumped by nearly 50% this year and is approaching a record high.

  • Berkshire owns nearly 6% of Apple, and has roughly quintupled its money on the iPhone maker.

Warren Buffett's iconic bet on Apple has ballooned in value to $177 billion, a figure that exceeds the market capitalizations of Nike ($175 billion), Disney ($168 billion), and Wells Fargo ($164 billion).

Buffett's Berkshire Hathaway conglomerate owns about 916 million Apple shares, giving it a 5.9% stake in the iPhone maker. It's striking that Berkshire's small piece of the business, and a single stock in its portfolio, is now worth more than many of America's largest public companies in their entirety.

Apple's share price has surged by nearly 50% this year to $193, or less than 3% below its all-time intraday high of $198, and topped a $3 trillion market cap on Tuesday. It has advanced 13% since the end of September, boosting the value of Berkshire's stake by $20 billion in that brief timeframe.

The stock has been buoyed by renewed excitement around Big Tech this year, as investors wager the elite group of companies will cash in on artificial intelligence, which promises to slash corporate costs and bolster profits. Apple is one of the "Magnificent Seven" stocks that have led the market higher this year, in part because of mounting hopes that the inflation threat is over, recession has been avoided, and the Federal Reserve will cut interest rates in the coming months.

Berkshire counts Apple as by far the biggest position in its roughly $350 billion stock portfolio, and ranks as the technology titan's number-two shareholder after Vanguard. It invested over $30 billion into the company between 2016 and 2018, and has roughly quintupled its money on paper.

Buffett famously sticks to betting on companies within his circle of competence, meaning he's eschewed technology stocks for much of his career. He embraced Apple after realizing the power of its brand and how indispensable its devices are to customers. He's also hailed it as a superior business to any of Berkshire's wholly owned subsidiaries, and praised Tim Cook as an exceptional manager.

Apple has been such a big winner for Berkshire that the late Charlie Munger, Buffett's business partner for over six decades, said in September that he regretted not building an even larger stake in the company. If Berkshire had plowed $50 billion into the stock at the same average price as its current position, its holding would be worth over $280 billion today.

Read the original article on Business Insider