- At Berkshire Hathaway’s annual shareholder meeting, Warren Buffett praised Apple CEO Tim Cook for his leadership of the company. Berkshire Hathaway’s Apple investment marked a rare foray into the tech industry for Buffett. Apple would eventually become one Berkshire’s most significant and lucrative investments.
When the world’s investors looked at iMacs, the iPod, and the iPhone and saw technological breakthroughs, Warren Buffet saw something much simpler: products everyone loved.
Buffett, who on Saturday announced his intention to step down from his role as CEO of Berkshire Hathaway by year’s end, made billions investing in Apple. Long wary of tech investments, Buffett made an exception for Apple. At one point in 2024, he was even Apple’s largest investor outside of ETFs.
Throughout the years, Buffett rather famously treated Apple as a consumer goods company, not a tech company. He was also enamored with Apple’s ability to create and market products that consumers seemingly couldn’t get enough of. In that sense, Buffett likened Apple more to Coca-Cola, another of his long-term investments.
At Saturday’s meeting, Buffett sang the praises of Apple and CEO Tim Cook for the returns it had delivered Berkshire Hathaway over the years.
“I’m somewhat embarrassed to say that Tim Cook has made Berkshire a lot more money than I’ve ever made Berkshire Hathaway,” Buffett said.
Cook, in Buffett’s estimation, had led the company admirably since Apple cofounder and CEO Steve Jobs stepped down in 2011, just months before his death.
“I knew Steve Jobs briefly, and Steve of course did things that nobody else could have done in developing Apple,” Buffett said. “Steve picked Tim to succeed him, and he really made the right decision. Steve died young as you know, and nobody but Steve could have created Apple, but nobody but Tim could have developed it as he has. So on behalf of all of Berkshire, thank you Tim.”
Jobs and Buffett had crossed paths a few times over their careers. In one instance, Buffett recalled that Jobs had called him for advice on what to do with Apple’s huge cash pile. Buffett suggested Apple buy back stock, which both men agreed was undervalued in their view. However, Jobs decided not to, opting instead to just hold onto the cash.
“He just liked having the cash,” Buffett told CNBC in 2012. “It was very interesting to me because I later learned that he said that I agreed with him to do nothing with the cash. But he just didn’t want to repurchase stocks, although he absolutely thought his stock was significantly underpriced.”
It would be another several years after his phone call with Jobs before Buffett became an Apple investor. Berkshire Hathaway first began investing in Apple in 2016. The move marked a significant shift in the firm’s investment strategy. Until that point, Buffett and his investing partner, the late Charlie Munger, had avoided investing in tech companies because they felt they didn’t understand the industry well enough to make informed decisions.
Several years before investing in Apple, Munger, Berkshire Hathaway’s then vice chair, acknowledged that it wasn’t a typical investment for the company despite its strong performance over the years.
“The whole world admires the achievements of Apple,” Munger told Reuters in 2013. “On the other hand, you could hardly think of another business that is more un-Berkshire-like than Apple.”
By 2016, Buffett and Munger would set that aside and begin building a massive stake in the iPhone-maker. That year, an investment manager at Berkshire had made a relatively small investment (for Berkshire Hathaway) of about $1 billion in Apple shares. Later that year, another Berkshire exec identified Apple as a promising stock, which sparked a streak of major investments.
Despite being relatively uninterested in the tech itself, Buffett admired the pull Apple products had on their consumers. “Warren could see how dominant the products were,” Munger told the Wall Street Journal in 2023.
From that point on Berkshire would continue to invest in Apple, which eventually became Berkshire’s largest investment. However, Berkshire has since diminished its stake. Last year, it sold billions in Apple stock as it built a tremendous cash pile, which it has to this day.
This story was originally featured on Fortune.com
