Last spring, when tech stocks were in the middle of a torrid rally that would eventually take Apple past the $1 trillion market-cap milestone (making it the first US-listed company to ever reach such a lofty valuation), Buffett said he would welcome a selloff in the consumer-tech giant’s shares because it would allow Berkshire to buy more at a discount.
Shifting back to the present day, it would seem Buffett got his wish. Apple shares have fallen 20% from their peak, largely thanks to a market rattling decision to cut Q1 guidance. And despite shaving 1% off its Apple stake during Q4, Buffett said he would still like to buy more, if only it were cheaper.
“If it were cheaper, we’d be buying it. We aren’t buying it here,” Buffett said during an interview Monday with CNBC. “I don’t see myself selling – the lower it goes, the better, I like it, obviously.”
Buffett has said in the past that his love of Apple is rooted in its strong product offerings, brand and ecosystem, and that its quarterly sales metrics don’t figure too heavily into his analysis of the stock. When evaluating Apple, Buffett considers it as a consumer stock, not a tech stock (a category that he typically avoids because of a professed lack of expertise). Last year, as iPhone sales were beginning to sag, Buffett said that he believed the phone – with the most expensive models priced at $1,000 – was actually “enormously underpriced.”
Regarding Berkshire’s decision to trim its Apple stake, Buffett told CNBC that he didn’t have anything to do with it. Rather, one of Berkshire’s money managers, either Ted Weschler or Todd Combs, sold the shares to raise capital for another investment.
But does Buffett still think the phone is underpriced? Or would he support a decision to lower prices to combat the onslaught of lower-priced models offered by rivals like Samsung and Google?
Watch a clip from the interview below:
Warren Buffett on Apple: ‘If it were cheaper, we’d be buying it’ from CNBC.