From Nasdaq: 2024-06-23 09:30:00

Warren Buffett’s successful track record in finance makes him a legend. Berkshire Hathaway’s investment moves are closely followed, with Apple being a standout stock. Berkshire’s initial investment in Apple in 2016 saw shares soar 714%, making it the conglomerate’s largest holding at 43% of their $390 billion portfolio.

Examining Warren Buffett’s decision to buy Apple can offer insights for investors today. Apple’s strong brand, customer loyalty, and powerful ecosystem created pricing power with a gross margin of 40.1% in 2015. The company’s solid financials and low price-to-earnings ratio of 10.6 in 2016 attracted Buffett.

Despite Apple’s past success, current investors should exercise caution. Apple’s growth has slowed, reflected in declining sales and a high price-to-earnings ratio of 32.7 today. Expectations for future growth may not align with reality, making Apple less attractive for investment compared to when Buffett first bought the stock.

While Apple has been a great investment, potential investors should consider other opportunities. The Motley Fool’s Stock Advisor team excluded Apple from their list of 10 best stocks. Stock Advisor offers a blueprint for success, including portfolio-building guidance and regular analyst updates. Nvidia, a previous pick, saw massive returns for investors who followed Stock Advisor recommendations.

Neil Patel and his clients have no stake in discussed stocks. The Motley Fool holds and recommends Apple and Berkshire Hathaway. This information provides insights on market trends but does not represent the views of Nasdaq, Inc.



Read more at Nasdaq: More Than 43% of Warren Buffett-Led Berkshire Hathaway’s $390 Billion Portfolio Is Invested in Only 1 Stock