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Warren Buffett just disclosed a stunning billion-dollar bet on Apple

Sam Ro
Managing Editor

Berkshire Hathaway is betting big on Apple (AAPL).

In a new regulatory filing, Berkshire disclosed that it owned 9,811,747 shares of the iPhone maker at the end of the first quarter. At the time, the position was worth $1.069 billion.

This position may surprise folks who've been following Warren Buffett, the chairman and CEO of Berkshire. Buffett has long been wary about investing in technology companies.

The IBM bet is looking like a mistake

This is not to say he has no exposure to tech companies. Berkshire holds 81.9 million shares of International Business Machines (IBM). While IBM is now largely a business services firm, its core competencies are in information technology.

Back in 2011 when Berkshire disclosed the position, CNBC's Becky Quick asked about this.

"IBM is a tech company, and you don't buy tech companies. Why have you been buying IBM?" Quick asked.

"Well, I didn't buy railroad companies for a long time either," Buffett responded.

Since that interview, IBM shares have fallen by 20% during a time when the S&P 500 surged 68%.

IBM has been a loser for Buffett.

But even Buffett acknowledges that Buffett isn't perfect.

"We've owned stocks that we've lost money in," Buffett told CNBC in February. "If I'm wrong, you sell them out and take a big loss. We've done that on a few occasions with stocks and bonds over the years."

Berkshire's position was worth about $12.4 billion at the end of the first quarter.

And what about Yahoo?

On Friday, Reuters reported that Buffett was backing a consortium making a bid for Yahoo (YHOO) assets. The consortium was reported to involve billionaire Dan Gilbert, who's chairman of Quicken Loans.

Buffett confirmed to CNBC on Monday that he could be involved in financing a deal, but he seemed to hint at his reluctance to invest in this "type of thing."

Dan Gilbert, chairman of Quicken Loans and owner of the Cleveland Cavs. (Photo by Jason Miller/Getty Images)

"I'm an enormous admirer of Dan and what he has accomplished in Quicken Loans," Buffett told CNBC‎. "Yahoo is not the type of thing I'd ever be an equity partner in. I don't know the business and wouldn't know how to evaluate it, but if Dan needed financing, with proper terms and protections, we would be a possible financing help."

That story is still developing.

Todd and Ted

Buffett continues to be in charge along with his right-hand man Charlie Munger. But, we can't rule out the possibility that this new position reflects the influence of his investment management deputies Todd Combs and Ted Weschler.

"These two investment managers will each have  responsibility for a segment of Berkshire’s present equity  holdings," Berkshire management said in a 2011 press release.

And Buffett hasn't been shy about giving them praise.

"In a year in which most equity managers found it impossible to outperform the S&P 500, both Todd Combs and Ted Weschler handily did so," Buffett said in his 2013 annual letter to shareholders. "I must again confess that their investments outperformed mine. (Charlie says I should add 'by a lot.') If such humiliating comparisons continue, I’ll have no choice but to cease talking about them."

Apple has certainly had its fair share of ups and downs. In the past year, it has had far more downs than ups.

Apple investors have had a rough years. But long-term holders are still deep in the money.

Apple's most recently completed quarter was marked by a sales flop. In fact, sales fell for the first time in 13 years. Shares collapsed in the wake of the earnings announcement.

So, is this a buying opportunity? Or a value trap?

Buffett and co. are obviously betting that it's the former.

Click here to view a full replay of the 2016 Berkshire Hathaway annual shareholder meeting, which Yahoo Finance live-streamed exclusively. At this page you can also find our extensive coverage of the event.

Sam Ro is managing editor at Yahoo Finance

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