Apple (NASDAQ:AAPL) is Warren Buffett’s largest stock investment by a mile. And while some investors worry about its artificial intelligence (AI) credentials, the firm just keeps growing.
In its latest update, the company announced annual revenue growth of 16% and earnings per share up 19%. That’s exceptional, so should investors be thinking about buying the stock?
Growth
Apple reported revenues of $143.8bn in the three months leading up to 27 December 2025. It’s a new record, but this isn’t the most impressive thing about the update.
For obvious reasons, the company often sees a boost around Christmas. But 16% annual growth is outstanding for a business that was already doing $124bn in sales.
Buffett once stated that the attachment people feel to their iPhone was a key part of the reason for buying Apple shares. And the number of users reached 2.5bn in the latest quarter.
The firm’s high-margin Services division also performed well. But the stock market didn’t really react to what I thought was a strong update and that gives investors something to think about.
AI
Until recently, the market’s view with AI has been that you’ve got to be in it to win it. And Apple has very much avoided joining in the huge capital investments made by other companies.
Instead, it’s focused on looking after its capital. In the last three months of 2025, it returned $32bn – almost half of Meta’s capital expenditures for the entire year – to investors.
Staying out of the arms race is a bold strategy and it can be a risky one. Investors who want to know about what happens when a tech company misses a major trend only need to look at Intel.
Apple, though, plans to make money from AI by charging other companies for access to its customer base. And if this strategy proves to be the right one, the rewards for investors could be enormous.
Valuation
Returning $32bn in capital to shareholders is a huge achievement. But investors should note that, in the context of Apple’s $3.8trn market value, it’s a return of less than 1%.
Put another way, the company is being careful with its cash and prioritising investor returns, but the stock is still expensive. And that’s an important consideration for anyone looking at the stock.
While Apple hasn’t been catching the attention of investors focused on AI (at least, not for positive reasons) it also hasn’t fared badly over the last five years. It’s handily outperformed the S&P 500.
As a result, it’s hard to say that the share price looks cheap at the moment. Despite scepticism over its AI strategy, investors are still buying the stock at a price-to-earnings (P/E) multiple above 30.
Berkshire Hathaway
Apple has been a huge part of the Berkshire Hathaway stock portfolio for some time. But Buffett has shown an inclination to reduce this in recent years.
I’ll be interested to see what the latest news is when the firm files its 13F in the next couple of weeks. In the meantime, though, the latest results from Apple look very strong.
I think the firm’s AI strategy could prove to be genius. Investors wary of big tech companies overinvesting might well want to consider the stock as a potential counterweight to this.
