Why Warren Buffett Loves Apple Stock

Warren Buffet

Apple's share price is riding high thanks to a strong endorsement last week from Buffett's Berkshire Hathaway, which increased its holding of Apple to become the company's third-largest investor. According to Market Watch, the stock is jumping towards its biggest six-day rally in nine years. "I went into Apple because I came to certain conclusions about both the intelligence with the capital they deploy, but more important the value of their ecosystem and how permanent that ecosystem could be".

Apple stock climbed to record heights Monday following bullish comments from billionaire investor Warren Buffett. "We buy them to hold", Buffett told CNBC.

If it crosses the trillion-dollar threshold, it will become the first U.S. company to do so - a title that fellow tech giants Amazon, Google and Microsoft have also been vying to achieve. I'd love to own 100 percent of it.We like very much the economics of their activities.

"Apple's an unbelievable company, and the multiple's not big, the top tech companies do have a very strong profit position right now but Apple has most of all".

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After offering its first stock buyback in August 2012, Apple has bought back $200 billion worth of stock, and just announced last week that it would repurchase an additional $100 billion in its shares. And we really like their management, their way of thinking and their way of acting, "he said with a smile".

He also said "I'm delighted to see them repurchasing shares". "When you're buying nonproductive assets, all you're counting on is the next person is going to pay you more because they're even more excited about another next person coming along". "And we could buy a lot of it".

However, Apple now remains far ahead of its rivals in terms of market cap, with Amazon trailing it at a valuation of US$773b. "Like I say, [Apple CEO] Tim Cook can do simple math and he can probably do very complicated math too", Buffett added.

Apple is once again closing in on becoming the first company to have a market cap of $1 trillion.

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