Legendary Investor Warren Buffettan ardent supporter of apple inc Stock, has highlighted the company's exceptionally dedicated customer base as a key factor in his admiration. According to Buffett, iPhone users demonstrate such an unwavering brand loyalty that even if they were offered $10,000, they wouldn't part with their phone permanently.
Do not miss: Why Silicon Valley elites are banking on a startup's vision to reunite American families
Berkshire Hathaway Inc., the investment group led by Buffett, owns the largest equity interest in Apple with 915 million shares valued at $151 billion. That investment accounts for about 6% of Berkshire's portfolio. According to CNBC's Berkshire portfolio tracker, Apple accounts for about 44% of Berkshire's total stock portfolio, which totals $344 billion.
During an interview with CNBC's Squawk Box, 92-year-old Buffett contrasted the loyalty of iPhone users with the behavior of car buyers.
“If you're an Apple user and someone offers you $10,000 but the only condition is that they take your iPhone away from you and you can never buy another one, you won't take it,” he said.
Buffett drew a contrasting analogy, emphasizing how consumer behavior can differ when presented with a similar offer on a different product.
“If they tell you if you buy another Ford car, they'll give you $10,000 if you don't. You take the $10,000 and buy a Chevy instead,” he said
To keep up to date with the most important startup news and investments, Sign up for Benzinga's Startup Investing & Equity Crowdfunding Newsletter
Buffett's view of Apple extends beyond its status as a tech company. He also thinks it's a consumer-centric business. His initial interest in buying Apple stock in 2016 arose when he observed his grandchildren's fascination with their iPhones during visits to Omaha Dairy Queen, a Berkshire-owned company.
Buffett continued to emphasize Apple's remarkable success, attributing it to the late Steve Jobs' groundbreaking products, with CEO Tim Cook successfully leading the company to new heights.
“Tim Cook has led this company in an extraordinary way,” Buffett said.
The savvy investor drew a parallel with his own business ventures, citing the tremendous value of Burlington Northern Santa Fe, a well-known railroad company, and Berkshire Hathaway Energy, a major utility. In Buffett's eyes, these companies are of comparable importance to Apple and illustrate the size and potential of the tech giant.
Some may question the decision to concentrate such a large portion of Berkshire Hathaway's portfolio in one stock, especially when it comes to Apple. But Buffett is quick to dismiss any doubts, emphasizing the unprecedented nature of Apple's business.
See Next: New battery far outperforms Tesla's lithium-ion battery with 50% lower price, 99% recyclability and three times longer lifespan
“We can't build a business like that,” he said. As a result, Berkshire Hathaway has acquired a significant stake in Apple, a position that's incrementally growing each year due to Apple's own share buybacks.
Buffett's deep appreciation for Apple is undeniable. In his own words, Buffett sums up his sentiments by saying, “It's a wonderful company, so we own a lot of it.”
Buffett's success story
Buffett is considered one of the best investors in modern history, and his record speaks for itself. From an early investor in GEICO (now owned by Berkshire Hathaway) to an early investor in American Express Company, Buffett has a long track record. One of his keys to success was finding companies with a lot of potential and then investing for the long term. The hurdles for investing like Buffett are constantly being broken down. Thanks to changes in federal law, investors on platforms like StartEngine can even own shares in start-ups and private companies and also invest in StartEngine itself.
For more information, see startup investments by Benzinga.
Don't miss real-time alerts on your stocks – join Benzinga Pro for free! Try the tool that will help you invest smarter, faster and better.
This article, “Warren Buffett's $151 billion gamble: Customers won't trade their Apple iPhones for $10,000, and here's why” originally appeared on Benzinga.com
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.