S&P 500 ^GSPC 5,300.89 -0.07%
Nvidia NVDA $1,137.59 +6.85%
Tesla TSLA $176.59 -1.48%
Alphabet GOOG $177.74 +0.80%
Amazon AMZN $181.92 +0.65%
Meta META $479.75 +0.32%
Microsoft MSFT $429.70 -0.11%
Apple AAPL $189.80 -0.09%

Buffett was right again. His favorite company is the only title that isn't drowning in problems after the results

Jamie Cameron
4. 11. 2022
4 min read

Warren Buffett is not considered the best investor of all time for nothing. He has shown his qualities over the long term, repeatedly and consistently. And he has done it again now. His favorite company excelled while the rest of the market bled.

Warren Buffett is undoubtedly an investment legend

The performance of most companies so far has been more in line with the general mood and state of the market. There are exceptions, but not many. It is all the more surprising when some of the huge names shine like this. Conversely, it's not such a surprise that it's a title that the Oracle of Omaha himself is banking on.

The entire market has already been down around 20% this year

Apple $AAPL+0.1%, with a total holding of about $133 billion, makes up about 40% of Warren Buffett's stock portfolio. That's why how Apple's products fare in each year is just as important to Berkshire Hathaway $BRK-B-0.9% shareholders as it is to Apple shareholders. Other Big Techs have rather disappointed in Q3 2022, but Apple is doing well. It posted solid results despite growing concerns that sales of iPhones and other consumer electronics will decline. That hasn't happened.

Year-to-date, though, Apple is up -17.5%. But the results are positive

It's not exactly breakneck growth, but that's okay. In the current market environment, the word growth (outside of the energy sector) is a complete rarity.

Buffett generally dislikes flashy and trendy investments, which is why he often shuns technology stocks in general. Apple, however, is a huge exception to the legendary investor's rock-solid rules. The American software and hardware maker may be a techie, but it has also built an incredible empire that continues to grow slowly and surely - exactly the type of investment Berkshire Hathaway prefers.

What are Buffett's ground rules?

https://www.youtube.com/watch?v=fErzHbEiQIs

Apple just closed its fiscal year 2022 (which corresponds to the end of the third quarter of calendar year 2022). In its fiscal fourth quarter, Apple reported that revenue grew 8% year-over-year to $90.1 billion. This was driven by a nearly 10% year-over-year increase in iPhone sales ($42.6 billion, or 47% of total revenue) in the quarter. Mac sales also jumped 25% year-over-year to $11.5 billion (13% of revenue) as more supply helped meet consumer demand, which was constrained earlier this year and last year.

Apple's results look like this

Throughout September and October, headlines piled up with reports that iPhone production was down. This sparked fears that Apple would be plagued by the same slowdown in smartphone and PC production that other tech companies have reported. Suffice it to say that this hasn't happened (iPad sales may be down 13%, but tablets now account for only 8% of sales).

It seems that those cuts in iPhone production were simply a reduction in production growth. Demand for the iPhone is now quite strong, especially as it grows in popularity in emerging markets such as India, Vietnam, Indonesia and Mexico. And Apple is holding on to its status as a "something more" brand even in these markets.

How is Apple doing in each region? Source

Of course, iPhone 14 prices have been increased in some markets (but not in the US), which is undoubtedly contributing to sales growth. However, just like last quarter, CEO Tim Cook and management continue to report that consumers are buying into the premium priced phones and will continue to buy.

But nothing is all rosy. Apple is being strangled by one external factor: the relentless rise of the U.S. dollar. A side effect of the US Federal Reserve 's historic interest rate hikes has caused the dollar to strengthen by double-digit percentages against other currencies this year. When companies like Apple make sales abroad and then convert them back into dollars, it reduces reported growth.

Specifically, Apple's CFO said that 8% growth in total sales would have been six percentage points higher (or 14%) in the most recent quarter if not for this exchange rate issue. You can really tell!

What does a strong dollar mean for the rest of the world? Source

But in any case, Apple is still the king of not only Buffett's portfolio, but also the Big Tech sector. It's hard to expect Apple to see any major problems unless it makes a huge misstep. And the Soothsayer will still continue to benefit from his brilliant investment.

How about you? Are you holding Apple and did the results make you happy?

If you enjoy my articles and posts, feel free to throw a follow. Thanks! 🔥

Disclaimer: This is in no way an investment recommendation. This is purely my summary and analysis based on data from the internet and a few other analyses. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.

Read the full article for free?
Go ahead 👇

Log in to Bulios

Log in and follow your favorite stocks, create a portfolio and discuss with others


Don't have an account? Join us

Pass the article on, or save it for later.