Just days after Apple published its first-quarter earnings report, Berkshire Hathaway, the Omaha-headquartered American multinational conglomerate and holding company, has purchased 75 million shares of the tech giant.
Now Wall Street is in a tizzy trying to figure why Berkshire Hathaway, Warren Buffett’s company, has purchased these additional shares of Apple. The news is raising eyebrows since Berkshire Hathaway by the end of 2017 already owned, according to CNBC, 165.3 million Apple shares. Add the recent 75 million shares to this, and the number skyrockets. Berkshire Hathaway acquired its first stake in Apple in 2016, purchasing 9.8 million shares.
Apple’s earnings report shows that it earned $61.1 billion in total revenue in its second fiscal quarter of 2018, narrowly beating market expectations. According to the company, international sales accounted for 65 percent of the company’s total revenue, and it was its best-ever second quarter for sales. Apple sold 52.2 million iPhones, 9.1 million iPads, and over 4 million Macs during the quarter, earning $38 billion, $4.1 billion, and $5.8 billion respectively from these three verticals. Apple CEO Tim Cook also shared that customers chose iPhone X more than any other iPhone in each week in the same quarter. The report hence also put an end to the concerns around the iPhone X model not doing as well as expected.
The purchase has been made ahead of Berkshire Hathaway’s annual shareholder meeting which will take place this weekend and be attended by 40,000 Berkshire shareholders. The quarterly reports of Berkshire will also be released shortly. Post the meeting and the quarterly earnings report, it may perhaps be clear why Berkshire has bought those 75 million shares.
Warren Buffett told CNBC, “It is an unbelievable company. If you look at Apple, I think it earns almost twice as much as the second most profitable company in the United States.” It looks like Apple might have its cake and eat it too.