Apple remains Buffett’s biggest public stock holding, but his thesis about its moat faces questions
Tim Cook and Warren Buffett
Getty Images (L) | CNBC (R)
Berkshire Hathaway‘s Warren Buffett was still using a flip phone as late as 2020, four years after his investment behemoth started amassing a huge stake in the company that makes iPhones.
“I don’t understand the phone at all, but I do understand consumer behavior,” Buffett said last year at Berkshire’s annual shareholder meeting in Omaha, Nebraska.
He’s emerged in recent years as one of Apple’s top evangelists.
At the end of 2023, Berkshire owned about 6% of Apple, a stake worth $174 billion at the time, or about 40% of Berkshire’s total value. That’s about four times bigger than Berkshire’s second-biggest public stock holding, Bank of America, and makes Berkshire the No. 2 Apple shareholder, behind only Vanguard.
As Berkshire investors and fanboys of the 93-year-old Buffett flood Omaha this weekend for the 2024 annual meeting, Apple is likely to be a hot topic of discussion. The tech giant on Thursday reported a 10% year-over-year decline in iPhone sales, leading to a 4% drop in total revenue. But the stock had its best day since late 2022 on Friday due largely to a $110 billion stock buyback plan and increased margins that result from a growing services business.
The bet on Apple and CEO Tim Cook, has paid off handsomely for Buffett, who said in 2022 that the cost of Berkshire’s Apple stake was only $31 billion. His firm is up almost 620% on its investment since the start of 2016.
Despite being a self-described luddite, Buffett has long had a coherent non-techie thesis for loving Apple. He’s seen how devoted Apple users are to their devices, and has viewed the iPhone as an extraordinary product that could keep its customers spending inside the Apple ecosystem. He calls it a moat, one of his favorite words for describing his preferred businesses.
“Apple has a position with consumers that they’re paying $1,500 or whatever it may be for a phone, and these same people pay $35,000 for a second car,” Buffett said at last year’s meeting. “And if they had to give up their second car or give up their iPhone, they’d give up their second car!”
Data is in his favor. According to a study from Consumer Intelligence Research Partners, Apple has 94% customer loyalty, meaning that nine out of 10 current U.S. iPhone owners choose another iPhone when buying a new device.
Buffett has also hailed Apple’s ability to return billions of dollars to shareholders annually through share buybacks and dividends, a capital allocation strategy for which Buffett may have himself to thank. When asked in a 2016 interview with The Washington Post who he turns to for advice at pivotal moments, Cook offered up a story about his relationship with Buffett.
“When I was going through [the question of] what should we do on returning cash to shareholders, I thought who could really give us great advice here? Who wouldn’t have a bias?” Cook said. “So I called up Warren Buffett. I thought he’s the natural person.”
Apple has shown its appreciation for the Oracle of Omaha in other ways.
In 2019, the company published an original iPhone game called “Warren Buffett’s Paper Wizard” in which a paperboy bikes from Omaha to Apple’s hometown of Cupertino, California.
But with Apple’s business having declined in size in five of the past six quarters and with the company expecting just low-single digit growth in the current quarter, Buffett may face questions this weekend about whether he still sees the same power in the moat, particularly with regulatory pressures building around tech’s megacap companies.
Buffett trimmed his stake in Apple late year, though only by about 1%. Even after Friday’s rally, the stock is down 3.8% in 2024, while the S&P 500 is up 7.5%.
‘Very, very, very locked in’
Berkshire’s initial foray into Apple in 2016 was not Buffett’s idea. Rather, the investment was led by Ted Weschler, one of Buffett’s top deputies, and was seen as a passing of the torch to the next generation of Berskhire investment mangers.
But the following year, Berkshire started purchasing even more Apple, and Buffett began talking it up. He said he liked the stock and the company’s “sticky” product, although he didn’t use it.
In 2018, he said Apple users are “very, very, very locked in, at least psychologically and mentally” to the product and the ecosystem.
“Apple has an extraordinary consumer franchise,” he said.
At last year’s annual meeting, when asked how Berkshire can defend having Apple make up so much of its public portfolio, Buffett said, “It just happens to be a better business than any we own.” He also hailed Cook, calling him one of the “best managers in the world.”
A number Apple likes to use to tout the health of its business, despite the declining revenue, is 2.2 billion. That’s how many devices the company says are currently in use and points to the massive customer base available as Apple rolls out new subscription services.
“Once customers get into the ecosystem, they don’t leave. So it’s not a a speculative tech play,” said Dan Eye, chief investment officer at Fort Pitt Capital Group, which owns Apple shares. “It’s kind of more like an annuity and I think that’s what Warren Buffett really sees as well.”
In addition to the drop in revenue, Apple faces new challenges from regulations and weak overseas markets, as well as from Microsoft and Google’s advancements in artificial intelligence. For regulators, the concern surrounds the very moat that Buffett finds so attractive, and whether its give the company monopolistic control in the smartphone market.
The U.S. government in March alleged that Apple designs its business to keep customers locked in. The Justice Department’s lawsuit claimed that products like Apple Card, the Apple Arcade game subscription, iMessage, and Apple Watch work best or only with an iPhone, creating illegal barriers to competition and making it harder for consumers to switch when it’s time for an upgrade.
However, the litigation is expected to take years, pushing any potential penalties to Apple and its products well into the future. In the meantime, there’s no sign that the iPhone is becoming less important as new devices like virtual reality goggles have found only niche audiences, while consumer AI products have failed to take off.
Buffett hasn’t voiced his view publicly on Apple’s regulatory hurdles, and this will be the first opportunity for investors to ask him about the issue since the DOJ’s lawsuit. But Buffett knows a little something about regulation — two markets where he’s most active are railroads and insurance.
In a note to clients earlier this month, Bernstein analyst Toni Sacconaghi didn’t go deep on regulatory concerns, but mentioned that he doesn’t believe the DOJ suit will “seriously threaten” the strength of Apple’s ecosystem. He also said that following Buffett’s lead on getting in and out of Apple is a solid strategy for making money.
“Despite his reputation as a long term buy and hold investor, Warren Buffett has been remarkably disciplined at adding to his Apple position when it is relatively cheap and trimming when it is relatively expensive,” Sacconaghi wrote. He encouraged investors to “be like Buffett.”
More money back
Odds are that Buffett was thrilled with Apple’s announcement this week regarding its expanded repurchase program. It’s a practice he’s long adored.
“When I buy Apple, I know that Apple is going to repurchase a lot of shares,” he said in 2018.
And he likes to note how buybacks result in getting a bigger stake in the company without buying more shares.
“The math of repurchases grinds away slowly, but can be powerful over time,” Buffett said in 2021.
Apple also increased its dividend by 4%, and signaled that it would continue to lift it annually.
Buffett was effusive about Apple’s capital return strategy at the company’s annual meeting last year, pointing out that it helped Berkshire own a bigger piece of the pie. Unlike insurance company Geico and homebuilder Clayton Homes, which his firm owns in their entirety, Berkshire can continue to increase its stake in Apple, a fact he reminded investors of at the meeting.
“The good thing about Apple is that we can go up,” Buffett said.
WATCH: Warren Buffett’s stake in Japanese trading houses helps them focus on capital efficiency
Microsoft President Brad Smith speaks at a press conference at the Representation of the State of North Rhine-Westphalia about future visions for the development and application of artificial intelligence in education in NRW in Berlin on June 4, 2025.
Soeren Stache | Picture Alliance | Getty Images
Microsoft is giving employees a way to raise concerns about the uses of its technology after controversy emerged over the company’s work in the Middle East.
An internal portal for Microsoft’s 200,000-plus workers now includes an option to request a “Trusted Technology Review,” Brad Smith, the company’s president, wrote in a memo that was disclosed in a securities filing on Wednesday. It’s designed for bringing up misgivings about the ways Microsoft builds and uses technology, he said.
“Our standard non-retaliation policy applies, and you can raise concerns anonymously,” Smith wrote.
The move comes weeks after Microsoft stopped providing some services to an Israeli defense unit. In August, The Guardian said the Israeli Defense Forces’ Unit 8200 had built a system in Microsoft’s Azure cloud for tracking Palestinians’ phone calls as part of the country’s invasion of Gaza, leading Microsoft to investigate the newspaper’s assertions.
Employees protested the company’s work with Israel, leading to firings and resignations.
Microsoft’s business has been on a tear, with its stock reaching a record last week, as OpenAI and other companies have deepened their reliance on Azure for running artificial intelligence models. Yet there’s been internal stress due to layoffs, return-to-office mandates and controversy surrounding Microsoft’s contracts.
A media report in July also described the U.S. Defense Department’s dependence on Microsoft engineers located in China.
Microsoft, which celebrated its 50th birthday in April, now sees opportunities to boost its governance.
“We are working to strengthen our existing pre-contract review process for evaluating engagements that require additional human rights due diligence,” Smith wrote.
A DoorDash bag on a bicycle in New York, US, on Tuesday, May 6, 2025.
Yuki Iwamura | Bloomberg | Getty Images
DoorDash reported third-quarter earnings that missed analyst expectations and said it expects to spend “several hundred million dollars” on new initiatives and development in 2026.
The stock sank 9% following the report.
Here’s how the company did compared to LSEG estimates:
- Earnings: 55 cents per share vs 69 cents per share expected
- Revenue: $3.45 billion vs $3.36 billion expected.
“We wish there was a way to grow a baby into an adult without investment, or to see the baby grow into an adult overnight, but we do not believe this is how life or business works,” the company wrote in its earnings release to explain the boosted spending.
DoorDash said it is developing a new global tech platform that progressed in 2025 but is expected to accelerate in 2026, noting the direct and opportunity costs in the near term. The company announced its Dot autonomous delivery robot in September.
The food delivery platform’s revenue increased 27% from a year earlier.
DoorDash posted net income of $244 million, or 55 cents per share, in Q3, up from $162 million, or 38 cents per share, a year ago.
Total orders grew 21% over the prior year to 776 million during the quarter that closed Sept. 30, just above the 770.13 million expected by FactSet.
The company expects Adjusted EBITDA for the fourth quarter in the range of $710 million to $810 million, a midpoint of $760 million. Analysts polled by FactSet expected $806.8 million for Q4.
DoorDash closed its acquisition of British food delivery company Deliveroo on Oct. 2, a deal that valued the UK company at about $3.9 billion.
The company expects a depreciation and amortization expense of $700 million for the fiscal year, exclusive of the acquisition. A stock-based compensation expense of $1.1 billion is also expected for fiscal 2025.
DoorDash expects Deliveroo to add $45 million to adjusted EBITDA in Q4 and about $200 million to adjusted EBITDA in 2026.
Doordash one-day stock chart.
-
Sports2 years agoStory injured on diving stop, exits Red Sox game
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment1 year agoHere are the best electric bikes you can buy at every price level in October 2024