From Yahoo Finance: 2025-04-14 10:48:00

Investors who bought Apple stock during the Great Recession or even five years ago have seen substantial returns. Warren Buffett, who holds the largest stake in Apple, saw key details in the stock that led him to load up on shares, making it his top holding. Apple’s strong customer loyalty and pricing power have positioned it as a luxury brand under Steve Jobs’ innovation.

Even though Buffett isn’t a tech stock investor, he made an exception for Apple, viewing it as a consumer goods company due to its pricing power and customer loyalty. He relied on portfolio manager Todd Combs to identify the stock that met his criteria, resulting in a lucrative investment. Buffett’s criteria included a low P/E ratio and strong projected earnings growth.

Buffett required a stock with a P/E ratio no higher than 15 and management confident in higher earnings over five years. He also sought a 50% confidence level in net income growth of 7% or more for at least five years. Retail investors can apply these criteria to smaller companies. Buffett’s strategy led to a successful investment in Apple, thanks to Combs’ assistance in identifying the opportunity.

Read more: How To Pick the Next Apple Stock, According to Warren Buffett