Warren Buffett has made some wonderful investments over the years, but I don't think any of those investments were as successful as the decision to buy Apple (AAPL 0.06%) in early 2016, a move that has led to tens of billions of dollars in gains. In fact, the tech stock currently makes up almost half of Berkshire Hathaway's massive $355 billion portfolio. 

Before rushing to buy the stock, which is up 231% in the past five years, investors should know these three things about Apple. 

1. Expect slower growth 

Due to its massive scale, represented by a market cap of $2.8 trillion and trailing-12-month revenue of $384 billion, Apple's future growth might not resemble the past. We're seeing this play out right now. In the latest quarter (third quarter of 2023, ended June 1), Apple registered sales of $81.8 billion, down 1.4% year over year. This was the third straight quarter of declining revenue. 

With products and services that seem ubiquitous by now, it's difficult to expect outsized top-line gains from the company. Between fiscal 2022 and fiscal 2027, Wall Street analysts estimate that Apple will increase its revenue at an annualized pace of 6%, slower than the 11.5% average clip in the previous five years. I think Buffett is fully aware of this reality, yet he remains a huge shareholder in the tech business.  

Unless Apple can introduce another game-changing hardware product that can move the needle from a financial perspective, investors should get used to this being a very mature enterprise. 

2. Dependent on the iPhone 

Apple's product lineup includes numerous items that have all experienced remarkable success. But nothing shines as bright as the iPhone, which still made up a sizable 49% of the company's overall revenue in the most recent quarter. And with so much attention still being directed toward the latest upgrade cycles, in particular new models, pricing strategy, and potential units shipped, the iPhone is still critical to Apple's success. 

Relying on a single product for most of its financial performance might be viewed as risky from an investor's perspective. Even in 2016, when Buffett first decided to invest in Apple, this was also the case. 

But the Oracle of Omaha also realized that the business was much more than just a typical hardware manufacturer. Apple's strength lies in its ability to create an ecosystem for its customers. The services segment, now accounting for 26% of company revenue and posting faster growth than product sales, drives stickiness and loyalty from consumers. 

To be fair, the iPhone will still drive results for the foreseeable future. And its success is still central to Apple's story. However, software should play a bigger role moving forward. 

3. Expensive valuation 

Even after taking a breather since the start of August, down 8% in the month, Apple shares are up 39% this year (as of Aug. 28). This continues several years of market outperformance. Consequently, shares trade at a trailing price-to-earnings ratio of 30, which is a significant premium to what the stock has sold for in the past decade. 

Although the current valuation looks expensive, investors might still be inclined to own the business due to its top-notch financial situation. Not only does Apple currently have a net cash position (equal to cash, cash equivalents, and marketable securities minus debt) of $57 billion, but the company generates more free cash flow (FCF) than it knows what to do with. During the first three quarters of fiscal 2023, Apple produced $81 billion of FCF. This was after the business posted FCF of $111 billion in fiscal 2022. 

The risk of Apple running into financial trouble is extremely unlikely, and this safety alone could be enough of a reason to own the stock. Buffett probably feels the same way, especially during uncertain economic times.