Berkshire Hathaway’s stock concluded the day at a 16-month high, nearly reaching a new all-time record.
With a remarkable $175 billion stake in Apple, Warren Buffett’s company enjoys substantial benefits from a thriving economy.
Over the course of his career, Buffett has steered Berkshire stock to an astonishing gain of approximately 4,300,000%.
On Thursday, Berkshire Hathaway’s stock reached its highest point in 16 months, boosted by the company’s significant stake in Apple and a positive outlook for the US economy.
Throughout the year, Class B shares of Warren Buffett’s conglomerate have surged by an impressive 15%. Closing at $354, they came close to their all-time peak of $360, which was achieved in March the previous year. Under Buffett’s leadership as CEO since 1965, Berkshire’s original Class A shares have experienced an extraordinary increase in value, soaring by an astonishing 4,300,000%.
The ongoing success of Berkshire Hathaway’s stock is significantly influenced by its Apple shares. The renowned investor’s company holds a substantial 5.8% ownership of the iPhone maker, translating to a remarkable $175 billion in value as of the latest market close. Astonishingly, this single position in Buffett’s portfolio represents a staggering 22% of Berkshire’s entire market value.
Apple’s stock has enjoyed a remarkable 47% surge this year, largely attributed to investors’ optimistic belief in its potential as a major beneficiary of artificial intelligence (AI). Enthusiasts of AI foresee a future where this technology will significantly enhance productivity and drive corporate profits higher. Among the key players expected to thrive in this space are Apple, along with other tech giants like Microsoft, Alphabet, and Tesla.
Berkshire shares have been uplifted by a more favorable economic environment. Last summer, inflation soared to a 40-year high of 9.1%, but it has since declined to 3% by June. To combat the surging prices, the Federal Reserve took swift action and increased interest rates from almost zero in the spring to over 5% at present. As prices are no longer rising significantly beyond the central bank’s 2% target, investors are hopeful that the Federal Reserve will adopt a more relaxed approach, steering clear of triggering a recession.
It’s important to recognize that Berkshire serves as a microcosm of the US economy, encompassing various businesses in insurance, energy, railroads, manufacturing, industrials, retail, and other sectors. Approximately 80% of its operating profits come from consumer-sensitive enterprises, as estimated by one analyst. Consequently, the conglomerate is susceptible to the impact of rising prices, higher borrowing costs, and concerns of a recession that could lead to a downturn in consumer spending.
On Saturday, investors can look forward to gaining fresh insights into the performance of Buffett’s businesses as Berkshire releases its second-quarter earnings report. During the middle of this month, Buffett will also share updates on his Apple stake and the other holdings in his stock portfolio.
