By Nicole Friedman
Warren Buffett's Berkshire Hathaway Inc. increased its stake in Apple Inc. by more than 200% in the fourth quarter, just before the iPhone maker rallied to an all-time high.
The purchases expanded Berkshire's stake in the technology giant to $6.6 billion as of Dec. 31. Its 57.4 million shares as of that date would be worth about $7.7 billion based on Tuesday's closing price.
Better-than-expected iPhone sales, building anticipation for the next edition of the phone and hopes for a U.S. tax cut on overseas profits have all helped to boost Apple's stock in recent weeks.
Apple rose 1.3% Tuesday to $135.02, a record closing high. The company is now worth $700.5 billion based on Tuesday's closing price, more than any other company world-wide.
Berkshire first bought Apple shares in May 2016 when prices were near two-year lows. One of Berkshire Chairman Warren Buffett's investing lieutenants, either Ted Weschler or Todd Combs, was responsible for the company's initial Apple investment.
Apple shares rose 3.7% the day Berkshire's initial stake was revealed, and have largely been on an upward trend since that time.
Mr. Buffett historically has shunned technology investments, saying they are outside his "circle of competence," or areas of expertise. But Mr. Combs and Mr. Weschler, who are slated to take over all the investing duties at Berkshire whenever Mr. Buffett steps aside, have shown a willingness to wade into corners of the market that Mr. Buffett himself won't touch.
Mr. Weschler explained the investment in a June interview with a German magazine, though he wouldn't confirm whether it was his position or Mr. Combs's. Apple's ecosystem keeps consumers loyal to its products, like a subscription model, Mr. Weschler told Manager Magazin.
Berkshire's A shares rose 0.8% Tuesday to $250,419, their first close above $250,000.
Separately, Berkshire also added a $2.2 billion stake in Southwest Airlines Co. during the fourth quarter and increased its holdings in American Airlines Group Inc., Delta Air Lines Inc. and United Continental Holdings Inc.
Berkshire's third-quarter 2016 investments in American, Delta and United surprised followers of Mr. Buffett. The billionaire investor has criticized airlines for decades as money-losers. However, he told Charlie Rose in a January interview that investing in airlines was "in large part my decision."
Mr. Buffett declined to comment through an assistant.
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