Warren Buffett's Favorite Stock That's Up 107,400% Since 1990 Is Still a Buy. Here's Why.

Why It Matters

Apple’s robust earnings growth and expanding AI‑driven ecosystem reinforce its status as a high‑quality, long‑term holding for value investors, even at a premium valuation. The company’s performance validates Berkshire Hathaway’s confidence and signals continued upside potential for shareholders.

Key Takeaways

• Apple Q2 FY2026 revenue $111.2 billion, 17% YoY growth.
• iPhone sales $57 billion, up 22% YoY, driving earnings.
• Services revenue $31 billion, 16% YoY, boosting margins.
• Forward P/E 32.8× exceeds tech average 23.5×, premium price.
• AI‑enhanced Siri and foldable iPhone signal new growth avenues.

Pulse Analysis

Buffett’s endorsement of Apple goes beyond a simple stock pick; it reflects a strategic partnership between Berkshire Hathaway’s capital discipline and Apple’s relentless innovation. Since Berkshire first bought shares in 2016, Apple has become the conglomerate’s largest holding, contributing a sizable portion of its portfolio’s upside. The 107,400% total return since 1990 underscores the compounding power of a durable brand, a massive ecosystem, and a management team that consistently exceeds market expectations.

Apple’s latest financials illustrate why the market still rewards the stock despite a premium valuation. In the second quarter of fiscal 2026, revenue climbed 17% to $111.2 billion, driven primarily by a 22% surge in iPhone sales that generated $57 billion. The services segment, now a $31 billion powerhouse, grew 16% year‑over‑year, highlighting the shift toward higher‑margin recurring revenue. Earnings per share rose 22% to $2.01, reinforcing the company’s ability to translate top‑line growth into bottom‑line profitability.

Looking ahead, Apple’s forward P/E of 32.8× signals investor confidence in its growth trajectory, even as it outpaces the 23.5× tech average. AI integration—exemplified by the upcoming Siri upgrade and the rumored foldable iPhone—positions Apple at the forefront of next‑generation consumer tech. Coupled with a record‑low‑cost laptop and a sprawling ecosystem of over 2.5 billion active devices, Apple’s moat appears both wide and deep. For long‑term investors, the blend of strong cash flow, expanding services, and innovative product pipelines makes Apple a compelling addition to a diversified portfolio.