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Image source: The Motley Fool
If there’s one stock that Warren Buffett loves, it’s that Apple (NASDAQ:AAPL). Buffett has been one of the biggest champions of the technology giant in the last decade, and he puts his money where his mouth is.
As of the latest filing, 38.9% of the parent company Berkshire Hathaway‘s portfolio is comprised of Apple shares. It is the largest single investment in Berkshire’s pot, ranking second Chevron comes in at 11.19%.
Apple’s stock price has increased significantly over the years, so Warren Buffett being a fan is understandable. However, I think the biggest growth years are still ahead.
The next iPhone
When looking at Apple, there is a clear before and after – before the iPhone and after the iPhone. The stock’s growth since 2007 has been almost entirely behind the popular device.
Even products that came after the iPhone have benefited from its success. The Apple Watch requires an iPhone, AirPods are designed to work best with an iPhone, and even Macs now use iPhone technology.
The success of the device was so great that the term ‘iPhone moment’ has been used to describe the breakthrough leap. More recently, ChatGPT has been described as the iPhone’s moment for AI.
But in the world of consumer goods, Apple may be having its own new iPhone moment. It is currently gearing up for augmented reality/virtual reality (AR/VR) devices to launch in 2023. Companies jumping into AR/VR could signal a seismic shift in an industry that has struggled to gain traction.
Now, Meta lead the VR space with the Quest line of headsets. However, it may be the only company targeting a large audience with multiple use cases for its device.
Meta hopes that people will use headsets like they currently use smartphones for socializing, working, and playing. As for the rest, like Sonyhas targeted the video game market with higher-end devices that cater to a small niche.
Apple has one of the best track records of any company for developing products that achieve mainstream success. It’s rare that a company creates something new. Touchscreen phones existed before iPhones, tablets existed before iPads, and wireless headphones existed before AirPods.
The best thing companies do is take technology and package it in a way that appeals to the masses… and charge a premium price.
A breakthrough for VR
The new AR/VR headset could be the VR industry’s best chance to reach a mainstream audience. The VR market is worth $21.83bn in 2021 and is expected to grow at a compound annual growth rate (CAGR) of around 15% to 2030. The arrival of Apple in this arena should fuel growth.
There is huge potential for AR/VR to be a big part of the future of human communication. I believe that AR and VR will eventually replace smartphones as we know them today. If that happens, the growth potential for the market-leading company will be huge.
Given its track record, I believe Apple could be one of the companies to lead the way. That’s why I’m buying shares regularly in 2023, hoping that it will behave like I bought Apple shares in 2007.
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