Warren Buffett told Berkshire Hathaway shareholders last year that Apple (AAPL -0.35%) was a "better business than any we own." And he has put his money where his mouth is through the years.
Apple ranks as Berkshire's biggest holding by far. It makes up a whopping 44.3% of the conglomerate's portfolio. Like many investors, Buffett has made a lot of money from his investment in the technology giant. Here's how much you'd have if you invested $10,000 in Apple stock when Warren Buffett first bought it.
Buffett's Apple-buying spree
Berkshire first initiated a position in Apple in the first quarter of 2016. Buffett and his team at first bought roughly 39.2 million shares of Apple.
The buying continued into the second quarter of 2016. Berkshire increased its stake in Apple by more than 55%. After remaining on the sidelines in the next quarter, Buffett accelerated things considerably in Q4, boosting Berkshire's position in Apple by nearly 277%.
During 2017, Buffett scooped up more shares of Apple in each quarter. By the end of the year, Berkshire owned close to 162.6 million shares of the iPhone maker.
Although Buffett kept on buying more Apple stock into the third quarter of 2018, he slammed on the brakes near the end of the year and trimmed Berkshire's position by 1.1%. The legendary investor also sold relatively small amounts of the stock in 2019 and 2020.
Buffett returned to buying Apple again in 2022, adding incremental shares in three of the four quarters that year. He also bought more shares in 2023 Q1. However, Berkshire reduced its stake in Apple by a little over 1% in 2023 Q4. Today, Berkshire owns nearly 905.6 million shares.
What a $10,000 investment in Apple then would be worth now
Berkshire Hathaway's stake in Apple is now worth nearly $164.3 billion. Of course, the conglomerate invested billions of dollars in the stock over the last eight years. If you had invested $10,000 in Apple when Buffett first bought it, you'd have much less but would have still enjoyed a tremendous return.
We don't know exactly what price Buffett paid for Apple back in the first quarter of 2016. Let's assume, though, that he bought the shares at the highest closing price of $27.39 during the period, to be conservative. (Note: This price is adjusted for splits. Apple conducted a 4-for-1 stock split on Aug. 28, 2020.)
If you bought $10,000 worth of Apple shares at that price and didn't sell any shares along the way, your investment would today be worth close to $66,250. At the stock's peak in late December 2023, your shares would have been worth a little over $71,000.
Note, however, that this total doesn't include reinvesting dividends. Apple paid dividends of at least $0.205 (on a split-adjusted basis) every quarter. Your total amount would have been even greater had you reinvested those dividends.
Looking ahead
Could you grow an initial $10,000 investment by more than 6.6 times over the next eight years with Apple? Maybe, but I wouldn't count on it. Two primary factors would make such a return difficult.
First, Apple's growth rate is slowing quite a bit. In the company's latest quarter, for example, revenue increased by only 2% year over year. Although Apple's services business continues to deliver solid growth, product sales continue to generate more than four-fifths of total sales.
Second, Apple's valuation is now high. Shares trade at 28 times forward earnings. That's an especially steep forward-earnings multiple for a company that isn't growing revenue rapidly.
Apple arguably remains the best business that Buffett's Berkshire Hathaway owns. However, at least for now, it's probably not the best stock in Buffett's portfolio.
