Apple Inc.
Company Overview
Apple is the world's most valuable company and Berkshire Hathaway's largest single investment. Berkshire began buying Apple shares in early 2016 — surprising many observers given Buffett's historical avoidance of technology companies. His explanation reframed the investment: Apple is not primarily a technology company but a consumer products company with an extraordinarily sticky ecosystem and the most valuable consumer franchise in history.
Investment Story
2016: First purchases. Berkshire's investment team (Ted Weschler and Todd Combs) initiated the Apple position in early 2016, beginning to build what became Berkshire's largest equity position. Buffett, when he reviewed the position, recognized the business characteristics that met all his criteria: consumer franchise, pricing power, ecosystem lock-in, and an aggressive buyback program that would automatically grow Berkshire's proportionate ownership.
2016–2018: Rapid accumulation. Berkshire spent approximately $36 billion building an Apple position of roughly 1 billion shares. The purchases were concentrated during a period when Apple's shares were under pressure from concerns about iPhone cycle maturity and U.S.-China trade tensions.
2020: A partial sale. Berkshire sold approximately 3% of its Apple position, reducing the stake from roughly 1 billion to just under 950 million shares. Buffett described this as likely a mistake and has not elaborated on the reasoning. The proceeds were deployed in other investments.
2022–2023: Position stable at ~$170 billion. Apple became approximately 38-40% of Berkshire's publicly traded equity portfolio — the highest concentration in any single public equity in Berkshire's modern history. Annual dividends from the position exceeded $800 million; the position's market value approached $175 billion on a cost basis of roughly $31 billion.
The buyback engine. One of Buffett's most explicitly praised characteristics of Apple: the aggressive share repurchase program. Apple spent $80-90 billion annually on buybacks in 2022-2023, reducing its share count by roughly 5% per year. Berkshire's proportionate ownership of Apple increased automatically each quarter without any additional cash investment.
Buffett's Own Words
's travel back to Eden, to a time when the apple had not yet been bitten. If you're my age you bought your first zero-coupon bonds during World War II, by purchasing the famous Series E U. S. Savings Bond, the most widely-sold bond issue in history. (After the war, these bonds were held by one out of two U. S. households.) Nobody, of course, called the Series E a zero-coupon bond, a term in fact that I doubt had been invented. But that's precisely what the Series E was. These bonds came in denominations
*But this small bite of the apple was more than enough to make the experience memorable. GEICO’s losses from this venture now total a breathtaking $94.1 million or about 130,000% of the net premium it received. Of the total loss, uncollectable receivables from deadbeat reinsurers account for no less than $90.3 million (including $19 million charged in 2002). So much for “cheap” reinsurance. * * * * * * * * * * * * Ajit Jain’s reinsurance division was the major reason our float cost us so little last year. If we *
American Express Company..................... 16.8 $ 1,287 $ 11,231 61,242,652 Apple Inc. ............................................. 1.1 6,747 7,093 6,789,054 Charter Communications, Inc.................... 2.5 1,210 1,955 400,000,000 The Coca-Cola Company ......................... 9.3 1,299 16,584 54,934,718 Delta Airlines Inc. .................................. 7.5 2,299 2,702 11,390,582 The Goldman Sachs Group, Inc. ................ 2.9 2,727 81,232,303 International Business Machines Corp. ....... 8.5 13,815
Company . . . . . . . . . . . . . . . . . . 17.6 $ 1,287 $ 15,056 166,713,209 Apple Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 20,961 28,213 700,000,000 Bank of America Corporation . . . . . . . . . . . . . . . . . 6.8 5,007 20,664 53,307,534 The Bank of New York Mellon Corporation . . . . . . 5.3 2,230 2,871 225,000,000 BYD Company Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 1,961 6,789,054 Charter Communications, Inc. . . . . . . . . . . . . . . . . . 2.8 1,210 2,281
Company Dividends(1) Retained Earnings(2) American Express 17.9% $ 237 $ 997 Apple 5.4% 2,502 Bank of America 9.5% 2,096 Coca-Cola 9.4% (21) Wells Fargo 9.8% 1,263 Total $2,966 $6,837 (1) Based on current annual rate. (2) Based on 2018 earnings minus common and preferred dividends paid. GAAP – which dictates the earnings we report – does not allow us to include the retained earnings of investees in our financial accounts. But those earnings are of enormous value to us: Over the years, earnings retained by our inves
Investment Lessons
Consumer franchise analysis applies to technology companies too. Apple is correctly analyzed through the See's Candies framework: customers pay premium prices (iPhone, Mac, AirPods) not because of superior specifications but because of ecosystem integration, social signaling, and the genuine difficulty of switching to Android. The customer relationships are sticky in exactly the way that defines a brand franchise. The fact that the franchise is delivered through technology doesn't make it less of a consumer franchise.
The buyback multiplier creates effortless compounding. Apple's aggressive repurchase program means Berkshire's proportionate ownership grows each year without any cash outlay. At a 5% annual buyback rate, Berkshire's 5.6% stake grows to roughly 6% over the next 3 years without Berkshire spending a dollar. This automatic ownership accumulation through a world-class business's capital return program is one of the most elegant compounding mechanisms available.
Portfolio concentration at maximum conviction. Berkshire's Apple position at nearly 40% of the equity portfolio represents the highest concentration in a publicly traded equity in Berkshire's modern history. This concentration reflects genuine conviction, not passive drift — Buffett has repeatedly passed on opportunities to diversify out of the position and has praised the investment explicitly.