Berkshire's Apple bet suggests faith in products

San Francisco

GIVEN all the pessimism about Apple Inc these days, one might wonder why Warren Buffett's Berkshire Hathaway Inc is betting US$1.1 billion on the company. But if sentiment on Wall Street is any guide, the Oracle of Omaha and his lieutenants have made a prescient play.

Even after Apple warned that the sales decline it experienced in the second quarter would continue in the subsequent three months, there are just two analysts among the 50 monitored by Bloomberg who recommend selling the stock. While the average 12-month target price has fallen from last July's peak, it remains at US$124.60, about 33 per cent above current levels.