May 20, 2024

Apple Shares Earn Warren Buffett $1 Billion in a Single Day

Warren Buffett’s bet on Apple has seemingly paid off, earning the investment giant about $1 billion in a single day on Wednesday.

Berkshire Hathaway, a multinational investment firm and holding company owned by Buffett, owns about 135 million Apple shares. Following a stronger-than-expected third quarter earnings report on Tuesday, shares of the Cupertino-based company rose about 5.11 percent on Wednesday, reaching a high of $157.72 at 9:30 a.m.

From here, it’s just simple math. If you multiply Berkshire Hathaway’s 135 million shares by the rise in Apple’s stock prices — about $7.67 — you’ll get $1,035,319,579. That means Berkshire Hathaway earned more than $1 billion on Apple stocks in just one day. Of course, it’s worth noting that this assumes that Buffett would sell his firm’s shares at that stock price.

Apple’s shares have declined slightly in the last couple days but have since leveled off at $156.25 by Friday afternoon, about a 2.02 percent decline since Wednesday’s high. At the current price, Berkshire Hathaway’s holdings still account for earnings of about $837 million.

In March, Buffett announced that his investment firm had purchased more than 120 million additional shares of Apple since January 1, 2017. That was a massive vote of confidence for the Cupertino-based tech giant, as Buffett historically shies away from major investments in tech companies. “Apple strikes me as having quite a sticky product, and an enormously useful product to people who use it,” Buffett told CNBC after news of the holdings spike broke. “It just has that quality. It gets built into their lives.”

Besides praising Apple’s various products, Buffett also commended CEO Tim Cook’s leadership. The business magnate went on to add that Apple was likely to reach a trillion dollar valuation even before Berkshire Hathaway’s increased holdings. Notably, various Wall Street analysts believe that this year’s highly anticipated iPhone 8 will spur a “super cycle” for the company. One particularly bullish analyst predicted that Apple could hit the $1 trillion milestone within a year, driven in part by the predicted iPhone 8 sales boom.

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