Apple Rallies 9% on News of Buffett’s Stake

The shares of Apple Inc (NASDAQ: AAPL) have edged higher by about 9 percent since the American business magnate Mr. Warren Buffett announced that his company has a stake in the tech giant. On May 16, Mr. Buffett revealed that the stake amounts to $1.2 billion.

The stock of the Cupertino, California-based tech company looked to be on the wane after the earnings call of the iPhone maker at the end of the previous month. During this earnings call, Apple Inc. announced that the sales of its iPhone device dropped for the first time ever. Furthermore, the company revealed that it has recorded a first year-over-year revenue decline in 13 years.

The shares of the tech corporation subsequently plunged below $90 for the first time in almost 2 years, as investors worried about the decline. Later on, it was also revealed that the activist investor Mr. Carl Icahn had earlier opted to sell his stake in Apple Inc. because of concerns regarding the attitude of China towards the Cupertino, California-based tech giant. Meanwhile, a second Apple investor Mr. David Tepper, had also sold off his shares as its value continued to decline.

However, just more than 2 weeks ago, a regulatory filing by the multinational conglomerate Berkshire Hathaway (a company run by Mr. Warren Buffett) disclosed that as of March 31, it holds 9,811,747 Apple Inc. shares. Since then, the stock of the iPhone maker has edged higher by 9 percent and even went beyond the $100 mark—its highest point in a month.

The business magnate somehow has a reputation for being able to affect stocks, which leads to a significant 11 percent rally of Kinder Morgan shares in the month of February, shortly after Buffett’s company Berkshire Hathaway announced that it owns a stake in the firm.

Yet, the tech firm has also experienced a reversal of fortune in its production targets for its next-generation iPhone 7, which it reported just recently. The device is anticipated to be launched in the month of September.

Contradicting the initial claims of projected downbeat demand for this upcoming iPhone model, the iPhone maker has reportedly asked its suppliers in Asia to get ready for the highest production target of the iPhone in approximately 2 years.

The investors of the Cupertino, California-based tech giant also seemed calm despite news in the present week that the retail expansion of Apple Inc in India may fall through, after a ruling from the government of India that the iPhone maker must sell locally sourced goods if it intends to open stores in the Asian country.

The tech giant stays eager to grow its business in India, where it witnessed its revenue surge by 56 percent during the previous quarter, going beyond $1 billion. The recent weeklong visit of the Apple CEO Mr. Tim Cook in India caught significant attention from the media and the iPhone maker will have considered it as a positive step towards its plan of global expansion.

As of 9:02 AM GMT-4 on Friday, the AAPL stock is changing hands at $100.41.

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