Warren Buffett and Jim Cramer are talented in their own right. One is an investing legend who has helped Berkshire Hathaway Inc. shareholders generate extraordinary returns for decades. The other is the charismatic host of “Mad Money” on CNBC who has made numerous intriguing stock picks, to the extent that there are now exchange-traded funds (ETFs) designed both in favor of and against his recommendations.
If you want to follow Buffett’s coattails, you can check out Berkshire Hathaway (NYSE: BRK-B) stock. If you are interested in Cramer’s picks, look into the Long Cramer Tracker ETF LJIM or the Inverse Cramer Tracker ETF SJIM.
The two icons of the investing world don’t always agree on every subject. For instance, last year Cramer said that Buffett and Berkshire Vice Chairman Charlie Munger were “out of touch” on cryptocurrency.
Yet both Buffett and Cramer share the same affection for one company — Apple Inc. AAPL.
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Buffett’s Bet
You don’t need to look far to see that the Oracle of Omaha is a big fan of the iPhone maker.
According to Berkshire’s latest Form 13F filing with the Securities and Exchange Commission (SEC), Buffett’s company owned 915,560,382 shares of Apple as of March 31. With the position valued at $150.98 billion at the time, Apple was by far the largest publicly traded holding at Berkshire.
Buffett has heaped generous praise upon the company.
“Our criteria for Apple was different than the other businesses we own,” he said at Berkshire’s 2023 annual shareholders meeting. “It just happens to be a better business than any we own.”
Berkshire first revealed its stake in Apple in May 2016 — a mere $1 billion position at the time. Buffett has accumulated a lot more shares since then, and the investment has served him well — in the last five years, Apple shares have surged 273%.
Cramer’s Call
Cramer saw the potential in Apple even earlier.
In 2010, when the iPad was first introduced, he said the product was “as addictive as Oxycontin” and urged investors to “pull the trigger on Apple.”
Over the years, Cramer also repeatedly told his audience that when it comes to Apple, it’s better to “own it; don’t trade it.”
More recently, Cramer pointed out why the company is so special.
“Apple’s in control of its own destiny because it’s the best at what it does,” he said on CNBC. “Apple takes something you didn’t even know you needed and turns it into something that’s indispensable. They’ve done this so many times because they’re focused on the long haul and the customer.”
An ‘Extraordinary’ Product
Apple has created a product that many people can’t live without.
Earlier this year, CEO Tim Cook revealed that the company had sold more than 2 billion active devices.
Even though the devices are not cheap — a fully decked-out iPhone 14 Pro Max costs $1,599 — consumers don’t want to live outside the Apple ecosystem. This allows the company to earn oversized profits year after year.
At Berkshire’s shareholders' meeting, Buffett highlighted Apple’s value to consumers by pointing out that the company’s smartphone is more important to users than a second car.
“Apple has a position with consumers, where they're paying maybe $1,500 bucks, or whatever it may be, for a phone. And the same people pay $35,000 for having a second car,” he said.
“If they had to give up a second car or give up their iPhone, they’d give up their second car. It’s an extraordinary product.”
Wall Street Likes The Stock, Too
Apple shares have surged more than 40% in 2023, and several Wall Street analysts see more upside on the horizon.
J.P. Morgan analyst Samik Chatterjee has an Overweight rating on Apple and a price target of $190, implying a potential upside of 6%.
Morgan Stanley analyst Erik Woodring has named Apple a “top pick.” Woodring has an Overweight rating on the company and a price target of $185 — around 4% above where the stock sits today.
Stocks are volatile, and even top analysts aren’t right 100% of the time. If you don’t like the market’s wild swings and prefer to earn a steady stream of passive income, you might want to look into reliable dividend plays outside the stock market.
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