Warren Buffett's BIGGEST Investment Just Posted RECORD Results!

TL;DR

Apple’s record results made Warren Buffett’s biggest investment especially valuable, with quarterly revenue reaching $89.6 billion, up 54% year over year. Berkshire Hathaway had invested more than $36 billion in Apple, and the position was worth $118 billion at the start of 2021. Apple reported strong growth across the iPhone, Mac, iPad, wearables, and services, making the detailed segment results worth reading.

Transcript

uh we would have uh one of the fellows in the office has about 10 million shares and i have for berkshire's account about 123 million so we got about 133 million shares one of them bought and then you as a result bought some additional one of them had 10 million shares and then i bought another 123 million shares or something like that why because ... Read More

Key Insights

• 🧑‍💻 Warren Buffett's substantial investment in Apple showcases his confidence in the tech giant's long-term growth potential.
• 🌥️ Apple's Q1 2021 results highlight the company's ability to maintain impressive revenue and income growth despite its status as a large corporation.
• 🇲🇰 The success of Apple's product offerings, including the iPhone, Mac, iPad, and wearables, contributes significantly to its overall financial performance.
• 🖐️ Apple's services segment also plays a crucial role in driving revenue growth, with strong demand for subscriptions like Apple Music and iCloud.
• 📈 The seasonality of Apple's results emphasizes the importance of analyzing year-over-year growth trends to understand the company's financial performance accurately.
• 🐕‍🦺 Despite its size, Apple continues to innovate and expand its product and service offerings, attracting and retaining a large customer base.
• 💦 Consumer trends, such as remote work and increased digital engagement, have positively impacted Apple's sales, contributing to its overall growth trajectory.

Questions & Answers

Q: What record results did Warren Buffett’s biggest investment post?

Apple reported revenue of $89.6 billion, up 54% year over year, and net income of $23.6 billion, up 110%. Earnings per share reached $1.40, an increase of 118% year over year.

Q: How much did Warren Buffett and Berkshire Hathaway invest in Apple?

Warren Buffett began adding Apple shares to Berkshire Hathaway’s portfolio in 2016, initially buying 10 million shares. The position later grew substantially, with more than $36 billion invested in Apple.

Q: How much was Berkshire Hathaway’s Apple position worth at the start of 2021?

Berkshire Hathaway’s Apple position was worth $118 billion at the start of 2021. It represented roughly 44% of Berkshire’s portfolio.

Q: Why should Apple’s results be compared year over year rather than quarter over quarter?

Apple’s financial results are highly seasonal, so adjacent quarters are not directly comparable. The transcript recommends comparing each period with the corresponding period from the previous year.

Q: How did Apple’s product revenue perform?

Apple’s product revenue reached $72.7 billion, rising 62% year over year. The increase reflected strong results across the iPhone, Mac, iPad, wearables, and accessories.

Q: How much did iPhone, Mac, and iPad revenue grow?

iPhone revenue increased 66% year over year, from $28.9 billion to $47.9 billion. Mac revenue rose 70%, from $5.4 billion to $9.1 billion, while iPad revenue climbed 79%, from $4.368 billion to $7.8 billion.

Q: How did Apple’s wearables and services businesses perform?

Wearables and accessories revenue increased from $6.28 billion to $7.836 billion, a 25% rise. Services such as Apple Music, iCloud, and Apple TV generated $16.9 billion in revenue, with the transcript reporting year-over-year growth of 287%.

Q: What explanations were suggested for Apple’s rapid growth?

Tim Cook attributed the performance to consumer enthusiasm for the new M1 chip and renewed confidence in Apple’s products. The speaker also raised stimulus spending and increased device demand from people working at home as possible explanations, while presenting them as theories rather than confirmed causes.

Summary & Key Takeaways

• Warren Buffett initially bought 10 million shares of Apple in 2016 and has since added substantially to his position, investing over $36 billion into the company.

• Apple's Q1 2021 results saw a revenue increase of 54% year-over-year, with net income up by 110% and earnings per share up by 118%.

• The growth in Apple's products and services revenue, particularly in iPhone, Mac, iPad, and wearables, contributed to the company's outstanding performance.