Warren Buffett’s Berkshire Hathaway has disclosed a stake in Apple, betting that the technology company will rebound after a slump driven by a slowdown in iPhone sales.
Berkshire held 9.81m shares as of the end of March, a regulatory filing from the billionaire’s Omaha, Nebraska-based company showed.
The holding was valued at $1.07bn at the end of the first quarter.
Apple last month reported its first quarterly drop in revenue in 13 years, stoking concerns that the company’s best days have passed.
The company’s share slide since the middle of last year may have created an opportunity for Berkshire, even though Mr Buffett typically avoids investments in technology companies.
“Apple at the current valuation makes a tonne of sense; it’s a consumer-product company more than a tech company,” Jeff Matthews, an author of Berkshire-related books, said about the new holding.
“The company has a great financial model, a great brand name, and a cheap stock.”
Apple shares were up by nearly 4% yesterday after having slumped 14% this year as of the end of last week.
David Tepper’s Appaloosa Management disclosed last Friday it sold out of its Apple stake in the first quarter.
Billionaire Carl Icahn said last month that he exited a position in the company because of concern about its relationship with China.
Apple CEO Tim Cook is pivoting toward services and exploring new technologies such as self-driving cars to reduce reliance on the iPhone.
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.
“What would make this stock a good buy is a whole load of projects we know they’re working on,” he said.
“They’re working on a TV, a car, a whole bunch of apps coming for the Apple Watch. We know mobile payments has just started off.”
The investment could have been made by one of Mr Buffett’s deputies, Todd Combs or Ted Weschler. Both have been building their own portfolios and typically take stakes of $1bn or less per company, while Mr Buffett makes larger wagers.
The filing does not specify the person behind each holding. Berkshire did not immediately respond to a message seeking comment.
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