But if sentiment on Wall Street is any guide, the Oracle of Omaha and his lieutenants have made a prescient play.
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Apple is having a good day, its stock rising about 3% after a slump blamed on slowing iPhone sales.
“Some investors are speculating the rise in oil prices is an indication that global economic activity isn’t as weak as they thought”, said Nescyn Presinede, a trader at Rizal Commercial Banking Corp.in Manila. “It has a boatload of cash”.
Shares of Apple rose by 3.7 per cent on the news, closing up US$3.36 at US$93.88.
The company’s almost 30-per-cent share slide since the middle of past year may have created an opportunity for Berkshire, even though Mr. Buffett typically avoids technology investments. Berkshire’s largest technology bet has been Buffett’s roughly $12.1 billion stake in International Business Machines Corp, an investment now more than $1.6 billion in the red.
Despite facing declining iPhone shipments, Apple managed to attract famed investor Warren Buffett’s Berkshire Hathaway, which snapped up $1 billion of the company’s stock.
The investment, however, was made before Apple revealed in April that its quarterly revenue declined for the first time in 13 years.
Warren Buffett made headlines around the world yesterday after his shock investment in Apple shares, as revealed in a regulatory filing to the United States Securities and Exchange Commission (SEC) on Monday night. Kristin Huguet, a spokeswoman for Apple, wasn’t immediately available to comment.
On Monday CEO Tim Cook met with Chinese officials, and last week he announced a $1 billion investment in ride-hailing company Didi Chuxing. Cyrus Mewawalla, managing director at London-based CM Research, said those initiatives are unlikely to pay off this year, but may reward more patient investors.
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“It’s a value stock that has the potential for a big growth”, said Steve Chiavarone, a portfolio manager at Federated Investors in NY. “We know mobile payments has just started off”. The purchase order was likely placed by his stock-picking team Todd Combs and Ted Weschler, who tend to take risks where Buffett may not. It could also be that Buffett now views Apple as more of a value stock than a tech stock (although there is no reason why it can’t be both), thus allowing it to pass through his net.
