Warren Buffett’s Big Bet on Apple Returns 36 Billion!

It’s been an ugly year for Warren Buffett — until now. His giant holding in runaway S&P 500 winner, Apple, is more than making up for a year of missteps.

Following last week’s blowout profit report, tech giant Apple (AAPL) is now up a blistering 49% this year. That puts the iPhone maker within striking distance of a $2 trillion market value. And Buffett’s Berkshire Hathaway (BRKB) is a huge winner — as nearly 46% of Berkshire’s U.S.-listed portfolio is in just one stock: Apple, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.

Putting this huge bet into dollars and cents: Berkshire is up $36 billion on Apple since May 1. That’s an important date as it’s roughly the time he panic-sold stakes in the airlines. Just this year, Buffett is up nearly $35 billion on this single stock. Apple is Berkshire’s only top five holding up by a double-digit percentage this year, and also with a 90 or higher IBD Composite Rating.

Fundamentals, which Buffett is famous for focusing on, justify the huge gains in Apple, says Dan Ives, technology analyst at Wedbush. “Overall these were blowout results which in our opinion will add another leg to the Apple long-term growth story,” he said.

Warren Buffett’s Huge Apple Bet

Investors are wringing their hands over the heavy, 6.4% weighting of Apple in the S&P 500. And that is larger than any other single stock in the S&P 500. Microsoft (MSFT) is No. 2 with a 5.8% weight, followed by Amazon with a 4.9% position.

But those concentrations pale next to Apple’s place inside Berkshire Hathaway’s portfolio of 46 stocks primarily listed on a U.S. exchange. Of those, Berkshire’s Apple stake alone is valued at north of $100 billion, or nearly half of the $234 billion portfolio.

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And yes, Buffett is down hard on some of his S&P 500 bets. This year alone, the value of Buffett’s current and recently expanded stake of Bank of America (BAC) is down 29%, or more than $10 billion. But even if you add up the Bank of America loss this year plus a $4 billion loss in Coca-Cola (KO) and a nearly $5 billion loss in American Express (AXP), it’s drop in the bucket next to the Apple gain.

The current value of Berkshire’s U.S.-listed public portfolio is now up more than $600 million this year — by far due to Apple.

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Buffett’s Apple call is a huge win, no doubt. But he’s not alone in cashing in.

Index investors, too, bet big on Apple. Vanguard Group, which runs the Vanguard S&P 500 ETF (VOO), is the world’s largest owner of Apple, with 337 million shares. Berkshire, which owns 245 million shares of Apple, is the third-largest Apple shareholder. BlackRock, another ETF provider, is the No. 2 Apple owner with 275 million shares.

Meanwhile, several sector ETFs also have large exposure to Apple. The Technology Select Sector SPDR ETF (XLK) holds a higher weight in Apple than any ETF, at 21.4%. Keep in mind too that only one of July’s top S&P 500 stocks were in tech.

But right now, owning a huge bite of Apple is certainly something Buffett is glad of.

Berkshire Hathaway’s Apple Position Is Huge

Largest positions in U.S.-listed stocks

Company Symbol Shares (millions) Sector Stock YTD change Composite Rating Value of Berkshire position (billions) % of portfolio
Apple (AAPL) 245.2 Information Technology 48.6% 93 $107.0 45.8%
Bank of America (BAC) 1,019.2 Financials -29.0% 37 $25.5 10.9%
Coca-Cola (KO) 400 Consumer Staples -16.2% 47 $18.6 7.9%
American Express (AXP) 151.6 Financials -24.6% 44 $14.2 6.1%
Kraft Heinz (KHC) 325.6 Consumer Staples 8.2% 75 $11.3 4.8%

Sources: IBD, S&P Global Market Intelligence

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