Is Apple Inc. (AAPL) the Best NASDAQ Stock to Buy According to Billionaires?

Apple Inc. (AAPL) has long been a favorite of billionaire investors, but recent shifts in institutional sentiment and market dynamics raise the question: Is it still the top NASDAQ stock to own? A deep dive into SEC filings, hedge fund strategies, and financial performance reveals a nuanced picture of sustained loyalty among long-term investors like Warren Buffett, alongside strategic rotations by others toward perceived growth opportunities.

Billionaire Backing: Buffett’s Unwavering Faith

Warren Buffett’s Berkshire Hathaway remains Apple’s largest shareholder, holding 28.11% of its portfolio as of early 2025, valued at $75.1 billion. This stake—300 million shares—reflects Buffett’s enduring belief in Apple’s “economic moat,” driven by its services segment (12% revenue growth in Q1 2025) and fortress balance sheet. Apple ranks 10th among NASDAQ stocks favored by billionaires, with 21 investors collectively holding $101.68 billion in the company.

Hedge Fund Shifts: A Rotation Toward Tesla?

While billionaires like Buffett double down, some top hedge funds have pivoted. Izzy Englander (Millennium Management) cut Apple by 9% while boosting Tesla (TSLA) by 195%, and Dan Loeb (Third Point) abandoned Apple entirely to increase Tesla exposure. The trend underscores skepticism about Apple’s near-term growth amid tariff headwinds and AI lags.

Financial Performance: Services Drive Resilience

Apple’s Q1 2025 results highlight a mixed trajectory. Revenue is projected to reach $94.4 billion (+4% YoY), driven by record services revenue ($26.7 billion, +12%). However, iPhone sales stagnated at $46 billion, reflecting soft demand in China due to tariffs. The company’s shift to India for production and tariff exemptions (reducing profit drag from 29% to 5%) offer hope, but iPhone 17 AI delays and tepid consumer interest in “Apple Intelligence” features cloud optimism.

Key Challenges: Tariffs, AI, and Legal Risks

• Tariffs and Geopolitics: A U.S. economic contraction in Q1 2025 (–0.3%) underscores risks, though Apple’s inventory buildup in the U.S. and India mitigates some exposure.
• AI Competition: Apple’s slow rollout of AI tools contrasts with rivals like Alphabet and Microsoft, leaving it vulnerable to investor rotations toward faster-growing tech names.
• Legal Battles: A federal judge’s ruling against Apple in its Epic Games dispute could pressure its App Store revenue, which already faces scrutiny over fee structures.

Valuation: Expensive, but Reliable?

Apple’s P/E ratio of 29.6x exceeds the tech sector average (14.8x), yet bulls cite its $1.04 annual dividend (a 4% increase in early 2025) and 12.6% payout ratio as proof of financial flexibility. Analysts project $8.20 EPS next year, supporting a “safer” valuation compared to volatile growth stocks.

Conclusion: A Top Stock, but Not for Everyone

Apple retains its status as a billionaire darling due to Buffett’s loyalty and its services-driven resilience. However, its ranking among the “best” NASDAQ stocks hinges on investor goals. For those prioritizing stability and dividends, Apple remains a pillar. For growth-focused funds, Tesla’s AI-driven narrative and cheaper valuations (TSLA’s P/E of 18x vs. Apple’s 29.6x) offer greater upside.

In 2025, Apple is the best stock for long-termists—not just because of its fundamentals but because of its unmatched ecosystem and Buffett’s seal of approval. Yet, with AI lags and geopolitical risks lingering, it’s a “best” that requires patience, not FOMO.

Final Verdict: A hold for most, but a buy for those willing to bet on Apple’s long game.