Apple stock closes at record high after Warren Buffett raises stake

The technology giant rose 4.1 per cent to US$184.15 ($262.36). Photo / 123RF

Apple stock was raised to a record high on Friday as markets reacted to news Warren Buffett had bought another 75 million shares in the first quarter.

The technology giant rose 4.1 per cent to US$184.15 ($262.36), topping its previous high of US$183.50 and placing it roughly US$20 per share short of a US$1 trillion market cap.

Buffett's commitment to Apple through his firm Berkshire Hathaway has surprised many, given the legendary investor's historical aversion to the tech sector, according to the Daily Mail.

Berkshire's initial investment in Apple was small, suggesting it was made by one of Buffett's investment deputies.

However, since the latest stake purchase, it has grown to a solid 240.3 million shares worth US$42.5 billion. On Friday, Berkshire stock rose 1.6 per cent to US$194.59.

"It is an unbelievable company," CNBC quoted Buffett as saying.

"If you look at Apple, I think it earns almost twice as much as the second most profitable company in the United States," he said.

Warren Buffett's multinational conglomerate Berkshire Hathaway bought 75 million more Apple shares in the first three months of the year. Photo / AP

The billionaire investor recently sold out of an unsuccessful investment in International Business Machines (IBM), at the same time he was buying Apple.

Berkshire said in February that the company's stake in Apple grew by about 23 per cent since the end of September to roughly 165.3 million shares.

Buffett has praised Apple Chief Executive Tim Cook and suggested he views Apple more as a consumer company, despite its Silicon Valley pedigree.

Cook said the company was "thrilled" to have Buffett on board, adding: "On a personal level, I've always greatly admired Warren and have always been grateful for his insight and advice," Cook said in a statement.

However, there may also be another reason for the investment: Berkshire's cash position.

Berkshire has gone more than two years since a major acquisition, and Buffett said in his annual letter that he wants one or more "huge" non-insurance acquisitions to help him reduce Berkshire's US$116b in cash and equivalents.

Berkshire typically discloses its largest common stock holdings and percentage stakes in its quarterly and annual reports.

The report for the first quarter is scheduled for release on Saturday morning, just before Berkshire's annual shareholder meeting in its Omaha, Nebraska, hometown.

Apple reported US$61.1b in revenue for the March quarter, up from US$52.9b last year, and promised US$100b in additional stock buyback.