Buffett's Uncharacteristic Praise: Why Tim Cook's Leadership is a Win for Berkshire and Investors
33min read At the 2025 berkshire hathaway annual shareholder meeting, Warren Buffett delivered a rare public acknowledgment of another CEO’s achievements. In a moment that underscored the growing influence of technology on Berkshire’s portfolio, Buffett thanked Apple’s Tim Cook for generating “substantial gains” for his investment firm. The remarks marked a pivotal moment in Buffett’s career, as he admitted Cook had made Berkshire more money than he himself had through his own stewardship of the company. This article explores the strategic implications of Buffett’s praise, Apple’s trajectory under Cook, and what it means for long-term investors.
The Apple Effect on Berkshire’s Portfolio
Berkshire’s investment in Apple—its single largest equity holding—has been a cornerstone of its returns in recent years. Since Buffett began purchasing Apple shares in 2016, the stock has risen over 300%, far outpacing Berkshire’s overall portfolio performance. While Berkshire’s Class A shares (BRK.A) have delivered an annualized return of about 9% since 2016, Apple’s gains have fueled much of the outperformance in recent quarters.
This long-term growth is no accident. Cook’s tenure has seen Apple transition from a hardware-centric company to a services powerhouse, with recurring revenue streams from platforms like Apple Music, iCloud, and the App Store. Services now account for 25% of Apple’s total revenue, up from 13% in 2015. This shift has insulated the company from the volatility of hardware cycles and positioned it for sustained growth, even as iPhone sales flatten.
The Post-Jobs Era: Cook’s Strategic Vision
Buffett’s praise for Cook reflects recognition of his ability to evolve Apple beyond its founder’s legacy. While Steve Jobs’ innovations built the company, Cook’s focus on operational efficiency, global supply chains, and ethical manufacturing has expanded Apple’s market reach. Under Cook, Apple’s revenue grew from $234 billion in 2016 to over $394 billion in 2023, with margins consistently exceeding 25%—a feat in a crowded tech landscape.
The data underscores the disparity: Apple’s contribution to Berkshire’s equity gains now rivals the combined returns of its traditional holdings in banks and insurance. This shift has reshaped Buffett’s investment philosophy, as he increasingly relies on passive stakes in tech giants rather than active management of subsidiaries.
Lessons for Investors: Leadership and Long-Term Value
Buffett’s acknowledgment of Cook highlights a critical truth for investors: management quality is a multiplier of capital returns. Apple’s stock performance since 2011 (under Cook) outpaces the S&P 500 by a staggering margin, even adjusting for dividends. Meanwhile, Berkshire’s success here underscores the power of concentrated, long-term bets in companies with strong governance and durable competitive advantages.
Conclusion: A New Era of Value Investing
Buffett’s praise for Cook isn’t just a nod to a single CEO—it’s a validation of the tech sector’s role in modern value investing. Apple’s $3 trillion market cap, its $200 billion in cash reserves, and its dividend yield of 0.6% (with consistent increases) make it a stable anchor in Berkshire’s portfolio. As Buffett himself noted, Cook’s leadership has been pivotal in turning Apple into a “cash-generating machine,” a quality Buffett has long sought in investments.
The numbers tell the story: since 2016, Apple has returned $74 billion to shareholders through buybacks and dividends, while Berkshire’s stake in the company alone accounts for 15% of its total equity value. With Cook now steering Apple into emerging markets like AI-driven health tech and augmented reality, the partnership between Buffett and Cook suggests a bright future for both. For investors, the takeaway is clear: in an era of rapid technological change, the best investments are those led by visionary management and underpinned by timeless principles of profitability and reinvestment.
As the 2025 shareholder meeting demonstrated, Buffett’s admiration for Cook isn’t just about past gains—it’s about the promise of sustained value creation for decades to come.
