Anyone who follows Warren Buffett knows that Apple (AAPL -0.55%) ranks as the biggest holding in Berkshire Hathaway‘s (BRK.A -2.76%) (BRK.B -2.81%) portfolio. And it’s not even a close contest. Apple makes up a whopping 43.6% of the portfolio, including shares owned by Berkshire subsidiary New England Asset Management. Bank of America comes in a distant second place at 9.2%.
However, Apple wasn’t always such a huge holding for Buffett. Berkshire only initiated a position in the stock around seven years ago. It’s been a big winner along the way. Just how big? If you invested $10,000 in Apple when Buffett first bought the stock, here’s how much you’d have now.
We don’t know the exact date that Berkshire opened a position in Apple. All we know for sure is that sometime during the first quarter of 2016, the conglomerate bought a little over 9.8 million shares. Since then, Berkshire has bought a lot more of the stock, including adding more shares in the fourth quarter of 2022.
Technically, Buffett owned some shares of Apple even before 2016. New England Asset Management first bought the stock in the second quarter of 2007. The investment firm became part of Berkshire Hathaway in 1998.
However, let’s keep things simple and go with the middle of Q1 2016 as our starting point. If you invested $10,000 in Apple at the opening price on Feb. 16, 2016, you would have picked up 105 shares. The tech giant has certainly delivered fruitful returns since then.
On Aug. 28, 2020, Apple conducted a 4-for-1 stock split. (The “S” on the above chart shows when the stock split occurred.) This would have increased your number of shares owned to 420.
Fast forward to today. Apple’s share price currently stands at close to $153. Your 420 shares would now be worth roughly $64,260 based on share appreciation.
Don’t forget the dividends
The story gets even better, though. We can’t overlook Apple’s quarterly dividends. The company initiated its dividend program in 2012.
Granted, Apple has never paid what you’d call a juicy dividend. However, over time, those dividends can make a difference. Let’s assume that you reinvested all of the dividends received since early 2016 into additional shares of Apple.
Your total return would have jumped from around 534.5% to 589.4%, thanks to those dividends. Instead of having around $64,260, your $10,000 would have grown to close to $68,940. Yes, Apple’s relatively puny dividends would have boosted your gain by more than half of your initial investment.
It’s not too late
There’s no question that Apple has been a big success story for Buffett. But is it too late for other investors to profit from the stock? I don’t think so.
Apple’s iPhone ecosystem remains exceptionally strong. I suspect that the company could significantly increase iPhone sales over the next few years if it launches a rumored foldable version. Services are also a major moneymaker and could be an even bigger deal if Apple rolls out a hardware subscription program.
Looking a little farther down the road, the introduction of 6G mobile internet could be on the way by 2030. That should spur another huge wave of iPhone upgrades. Apple is also working on a non-invasive glucose monitoring system for Apple Watch. If successful, this could enable the company to dominate another $16 billion market.
I’m not sure if Apple will be able to grow an initial $10,000 investment today into more than $60,000 within the next few years. However, I predict that the stock will make Buffett even wealthier over the next decade and could do so for other investors, too.
Keith Speights has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.