Warren Buffett’s Berkshire Hathaway likely scored a $50 billion gain on Apple in 2020

• Warren Buffett’s Berkshire Hathaway probably made a $50 billion gain on its Apple bet last year, boosting its total gain from the tech investment to more than $90 billion.
• The billionaire investor’s company spent about $35 billion building its Apple stake, which surged in value from roughly $72 billion to $125 billion in 2020, assuming Buffett hasn’t slashed the position.
• Apple made up almost 48% of the value of Berkshire’s $229 billion stock portfolio at the end of September.
• Buffett has praised the iPhone maker as “probably the best business I know in the world.”
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Warren Buffett’s Berkshire Hathaway likely scored a $50 billion gain on its Apple investment in 2020, lifting its total paper profits from the technology bet to north of $90 billion in less than five years.

The famed investor’s company plowed about $35 billion into the iPhone maker between 2016 and 2018, securing a roughly 5.5% stake. Apple’s climbing stock price more than doubled the value of Berkshire’s position to about $72 billion at the start of 2020, then boosted it to $109 billion by the end of September, despite Buffett and his team selling close to 4% of their stake in the third quarter.

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Assuming Berkshire didn’t sell more shares last quarter, its position was worth about $125 billion at the end of December, thanks to a remarkable 78% rise in Apple’s stock price last year. That would represent a $50 billion gain on the holding in 12 months, and a roughly $90 billion or 250% gain on its original wager, ignoring a few tweaks to the size of the stake over the years.

Berkshire’s Apple bet proved to be a blessing last year, as other key holdings such as American Express, Bank of America, and Coca-Cola disappointed. However, Buffett’s company has become increasingly reliant on the tech titan – its Apple stake accounted for almost 48% of its $229 billion stock portfolio at the end of September, and continues to be worth more than 20% of Berkshire’s market capitalization.

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Buffett has downplayed any concerns about the concentration. “I don’t think of Apple as a stock,” the Berkshire CEO told CNBC’s “Squawk Box” last February. “I think of it as our third business,” he continued, along with railroads and insurance.

The consumer-electronics giant is “probably the best business I know in the world,” Buffett added.

Here’s a chart showing Apple’s remarkable rise over the past five years: