The investment, however, was made before Apple revealed in April that its quarterly revenue declined for the first time in 13 years. The buy indicates that it’s betting that Apple’s intrinsic worth is more than Wall Street believes, and that over time its growth will convince other investors. Apple was the only new position taken during the first quarter by Berkshire, according to the firm’s latest 13F filing.
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As of March 31, Buffet’s company Berkshire Hathaway Inc. reported owning 9.81 million shares of the technology company, according to a Securities and Exchange filing on Monday. Gartner Inc. predicts that smartphone sales growth will fall to the lowest level ever this year. It has since taken a new stake worth $1 billion in Apple.
The Apple stake may have been bought with proceeds from the sale of AT&T stock by Berkshire this year.
Buffett didn’t immediately respond to a message from The Associated Press early Monday.
Investors said Mr Combs may have been the Apple buyer. But Combs is the most likely, as he put some Berkshire money into Intel Corp. Apple’s inability to post EPS growth, and management’s guidance for more year-over-year declines in the current quarter, have investors anxious that things could continue downhill from here.
The value of that stake has dropped since then, to about $917 million, due to further declines in Apple’s share price.
Shares of Apple have fallen by almost one-third since April 2015.
“One of the bigger aspects that drive someone like Warren Buffett to invest is Apple’s cash flow and he is probably looking at that as a way this investment can work for him”, Gene Munster, managing director and senior research analyst at Piper Jaffray, told ABC News.
Berkshire, meanwhile, continued to bet on Phillips 66, increasing the size of its investment by 23 percent to $6.5 billion.
The billionaire investor has typically eschewed tech stocks, opting instead for blue chip companies like Kraft Heinz, Wells Fargo and Coca-Cola, among others.
David Tepper’s Appaloosa LP sold its stake in the first quarter, and Ray Dalio’s Bridgewater Associates cut its stake by two-thirds.
On Monday he also told CNBC that he would consider helping Dan Gilbert, chairman of Quicken Loans, finance a bid for the internet firm Yahoo.
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Berkshire’s first big jump into the tech space came in 2011 when the firm reported a position valued at more than $10 billion in International Business Machines Corp.
