Warren Buffett Just Reaffirmed Apple as One of His Favorite Stocks -- Even as Tim Cook Prepares to Step Down

Warren Buffett stepped down as CEO of Berkshire Hathaway (NYSE: BRKB)(NYSE: BRKA) at the end of 2025, but he still speaks out on some of the conglomerate's investments. And in a CNBC interview on Wednesday, he made clear that his view of Apple (NASDAQ: AAPL) hasn't budged. It remains one of his favorite businesses, he said, even with a change at the top just weeks away.

That change is no small thing. Apple announced in April that longtime CEO Tim Cook will become executive chairman on Sept. 1, handing the chief executive job to hardware engineering chief John Ternus. A leadership handoff at one of the world's most valuable companies would normally give investors pause.

Buffett, whose Berkshire owns more than $70 billion in Apple stock, doesn't seem worried.

So does his continued conviction make the stock a buy near its record high? Let's take a look.

Image source: The Motley Fool.

A business Buffett knows well

Buffett first bought Apple in 2016, and it has grown into Berkshire's single biggest position. It accounts for about 22% of the conglomerate's roughly $263 billion equity portfolio, according to its most recent quarterly filing, making it Berkshire's largest holding by a wide margin.

More telling still, Berkshire left the stake untouched in the first quarter, its first full period under new CEO Greg Abel. After years of steady trimming, standing pat amounts to a quiet vote of confidence.

Part of Buffett's ease with the succession may be that Apple's staying power doesn't rest on any one executive. Ternus has been at the company since 2001 and has run hardware engineering through the iPhone's most important years.

And the numbers he inherits are strong. In its fiscal second quarter (the period ended March 28, 2026), Apple's revenue rose 17% year over year to $111.2 billion, and earnings per share climbed 22% to $2.01. Both were March-quarter records.

iPhone revenue jumped 22% to a record $57 billion, powered by demand for the iPhone 17 lineup. Services revenue, meanwhile, hit an all-time high of about $31 billion, up roughly 16% year over year.

That services business is the quiet engine here, and it's the piece I'd watch most. It carries a gross margin near 75%, against about 39% for products, so as it outgrows the rest of the company, it steadily lifts Apple's overall profitability.

Zoom out, and the trajectory is the real story. Apple's revenue grew just 6% in fiscal 2025, then accelerated to that 17% pace in the March quarter. Management has guided for 14% to 17% growth again in the current quarter, which Apple will report later this month.

After several sluggish years, in other words, this is a business reaccelerating. That helps explain why Buffett is content to leave it as Berkshire's anchor holding through a CEO change.

The price of that conviction

But is the stock overvalued?

Apple stock climbed about 4% on Wednesday to roughly $328, a fresh record, and it is up more than 55% over the past year, well ahead of the S&P 500. At that price, shares trade at close to 40 times earnings -- a steep premium to the broader market's roughly 25. Even on next year's expected profits, the multiple eases only to the mid-30s.

But I think Apple stock is worth its premium.

Not only is the business accelerating, but it's also built on an enduring, proven brand and a loyal customer base. Then there's the potential for AI to further accelerate both its products and services businesses, as it gives customers reasons to upgrade and potentially opens the door to entirely new product categories.

Additionally, Buffett's conviction is worth taking seriously. Not only is he a renowned investor, but he's putting his money where his mouth is -- and he hasn't sold any Apple shares this year.

So, is Apple a buy up here? I think so.

Sure, there are risks. But I agree with Buffett on this one. Apple is a stock worth owning. With that said, it's worth being clear that Berkshire hasn't been buying Apple stock at this level -- least not that we know of. So it's not fair to say that Buffett thinks Apple stock is a buy. But he certainly likes owning it -- and he likes owning a lot of it. Further, Berkshire's position size is arguably already borderline oversized, so it makes sense he isn't adding.

Daniel Sparks and his clients have positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.