Apple released its fiscal third-quarter profits on Thursday, which exceeded the projections of Wall Street. The company’s total revenue increased by 5%. Its Q3 earnings report demonstrated why it remains a dominant force in the technology industry. Whatever Apple accomplishes, one name will always be associated with the company: Steve Jobs.
This time, a 2012 account of Jobs asking Warren Buffett for guidance on how to use Apple’s cash reserves is making the rounds on the internet. Buffett discussed a noteworthy phone conversation he had with Jobs in a 2012 appearance on CNBC’s Squawk Box.
Buffett stated, “It was an interesting conversation because I hadn’t talked to him in a long time,” during the Ask Warren segment. He stated ‘We’ve got all this cash. What should we do with it?’ So we went over the alternatives. It was kind of interesting.”
Buffett continued by saying that the utilisation of cash may only serve for four things: dividends, purchases, stock buybacks, or “sitting with it.”As Buffett recalled, Jobs explicitly stated that Apple would not pursue large acquisitions requiring substantial funding.
Jobs said, as revealed by Buffett, “I think my stock is very undervalued,” in response to his suggestion that Apple repurchase shares if it felt its stock was undervalued. However, Jobs decided not to heed Buffett’s counsel.
“He didn’t do anything, and of course, he didn’t want to do anything. He just liked having the cash,” Buffett added with a giggle. “It was very interesting to me because I later learned that he said I agreed with him to do nothing with the cash.”
Buffett said that looking back, he wishes he had purchased Apple shares. He was initially wary of making tech investments, but thanks to Berkshire Hathaway, he is now a significant stakeholder in Apple.
In an interview with Squawk Box in 2020, Buffett emphasised Apple’s value to Berkshire by stating, “I don’t think of Apple as a stock. I think of it as our third business.” In a 2023 interview with CNBC, Buffett ruther said he was impressed by Tim Cook’s management style at Apple. He highlighted Cook’s in-depth knowledge of the industry and called him “one of the classiest CEOs.” Buffett added that Cook has run the firm in an “extraordinary way.”
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