2 Reasons This Warren Buffett Favorite May Soar in 2026

Warren Buffett led Berkshire Hathaway to market-beating success over six decades, and in recent years, his top holding was one you might not expect. The reason I say this is Buffett doesn't often invest in this industry, but from time to time, makes an exception. This is the tech industry, and the stock is smartphone giant Apple (NASDAQ: AAPL).

Though Buffett, who retired at the end of 2025, progressively reduced his position in the company in recent quarters, it remains the largest holding in the Berkshire Hathaway portfolio. And the investing giant clearly hasn't lost faith in the company, as he praised Apple chief Tim Cook as recently as last May, during the Berkshire Hathaway shareholder meeting.

Let's check out two reasons why this Buffett favorite may soar in 2026.

Image source: The Motley Fool.

1. Investors rotate into new potential winners

In recent years, investors have focused on artificial intelligence (AI) stocks due to the growth potential in the space. But Apple wasn't very high on their buy list, and this is reflected in the stock's performance over the past few years in relation to others.

AAPL data by YCharts

Apple was slower than its tech peers to get in on AI -- it only began launching AI features on its devices about a year and a half ago. So it wasn't necessarily seen as a major AI winner, especially compared to chip designers and cloud services companies.

But now, as investors seek out new potential winners and the safety of companies that have proven themselves, they may turn to Apple. And that could help the stock to take off this year.

2. Services growth potential

You can count on revenue from Apple's sales of smartphones, Macs, and its other much-sought-after devices. The company has demonstrated the strength of its brand over time, as customers are loyal and eager to get in on the next product update.

The next big growth driver, however, may not be a product, but instead, the result of Apple's work over the past several years. The company now has more than 2.5 billion devices active worldwide, and they represent the key to recurring revenue. This is through Apple's services business.

Today, when customers buy an iPhone, they generally don't stop there. They will then sign up for extras such as digital entertainment or storage, and this represents additional revenue for Apple that keeps coming in on a regular basis. We've already seen the results of this trend, with Apple reporting record services revenue in recent quarters.

This growth, along with the desire to seek out new potential AI winners and a bit of security, too, could help this Buffett favorite soar in 2026.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, Berkshire Hathaway, Nvidia, and Palantir Technologies and is short shares of Apple. The Motley Fool has a disclosure policy.