Despite recent challenges, including a decline in revenue and antitrust charges, Apple is still considered a strong investment by Warren Buffett’s Berkshire Hathaway. In fact, Apple is Berkshire’s largest holding, and Buffett himself has praised Apple as an even better business than Coca-Cola and American Express. Despite selling some of its Apple stock, Berkshire is likely to maintain its position in the company for the foreseeable future.
Although Apple has faced some setbacks, such as a recent antitrust lawsuit filed by the U.S. Department of Justice, the company’s strengths are significant. Its services division has performed well, and it is embarking on a large stock buyback program. While iPhone and iPad sales have dipped, a new iPad has just been released, and the highly anticipated iPhone 16 is expected to launch in September.
One of Apple’s key advantages is its ability to retain customers over the long term. Morningstar analyst William Kerwin noted that the company has a “wide moat” that makes it difficult for customers to switch to non-iPhone products, which is a major focus of the antitrust lawsuit. Despite past challenges, Apple has consistently bounced back and rewarded investors over time.
In terms of financials, Apple is trading at a slightly higher price/earnings ratio compared to the overall market, but still remains reasonably priced. It is also cheaper than several of its mega-cap tech rivals, such as Nvidia, Amazon, and Microsoft. Over the past five years, Apple’s stock has increased fourfold, despite recent dips, and is not far from its peak in late 2023.
Looking ahead, Investors are optimistic about Apple’s prospects, particularly with the upcoming launch of the iPhone 16 and other new products. Despite concerns about Chinese consumers losing interest in Apple products and the impact of the antitrust lawsuit, many believe that the company’s loyal customer base and strong brand will continue to drive success in the future. Warren Buffett’s continued confidence in Apple also serves as a vote of confidence for the company’s long-term potential.
