Warren Buffett Is Already Betting Big on the Metaverse via His Shares in This Company.
It is already ideally oriented to take advantage of the growth of this new universe.
To say that Warren Buffett is a conservative investor would be an understatement. The Oracle of Omaha has always succeeded by following the same strategy: choosing companies based on their value as his spiritual master Benjamin Graham taught.
Value investing has worked extremely well for Warren Buffett who has made Berkshire Hathaway an incredible success over the years.
However, Warren Buffett's strategy has shown its limits since the beginning of the 2000s and the arrival of tech companies. Warren Buffett does not understand new technologies, and he simply does not like them. He missed investments in Google, Facebook, or Amazon (at the beginning).
On the other hand, Warren Buffett has always been a big fan of Apple, of which Berkshire Hathaway now owns more than 907 million shares, which represents more than $151 billion at the time of writing. Warren Buffett believes so much in Apple that the company led by Tim Cook represents 44% of his portfolio as of December 31, 2021.
And it is precisely through Apple that Warren Buffet is perfectly positioned to profit from the Metaverse in the future. A field in which Mark Zuckerberg believes more than anything in the future. He has indeed renamed Facebook to Meta to better mark the strategic shift of his company. For the moment, this has not been successful for Meta, which saw its value collapse on the stock market after the publication of its results at the beginning of 2022.
If the Metaverse is the future as Mark Zuckerberg thinks, many investors believe that Meta's huge investments will take a long time to bear fruit.
That's a problem Apple won't have. Apple is already perfectly positioned to take advantage of the Metaverse's eventual rise in the future by providing the essential gateway for its users: virtual and augmented reality headsets. For Warren Buffett, this is something palpable, since we are talking about hardware. It's something he understands and values, as he often says that Apple is “probably the best business I know in the world”.
Apple's soft approach with the Metaverse is also likely to reassure Warren Buffett who hates to follow the masses. Apple is betting a lot on the Metaverse for the future, but it is out of the question for the firm led by Tim Cook to give in to the buzzword as Mark Zuckerberg did. If Apple intends to take advantage of the Metaverse, it will be at its own pace by imposing its codes as always.
A conservative approach mixed with technological innovation better suits Warren Buffett's investment philosophy. This is a certainty.
Recently, Tim Cook pointed out that there are already more than 14,000 augmented reality (AR) kit apps in the Apple App Store. Tim Cook then added:
“We see a lot of potential in this space and are investing accordingly.”
The last two words pleased investors who would love for Apple to start using its mountain of available cash, just over $200 billion, to continue innovating. Augmented reality glasses are also announced on Apple's side for the coming years. Enough to seize the opportunities of the Metaverse.
Of course, if Warren Buffett is already ideally placed to take advantage of the Metaverse's potential growth over the next decade, he appreciates that this is not the only possible growth driver for Apple. Apple will continue to grow its market share while taking advantage of the 5G boom to generate ever more profits. Notions that speak strongly to Warren Buffett.
Finally, the famous Apple Car that has all Apple fans dreaming of the mid-2020s should allow the firm led by Tim Cook to continue to see its market cap rise sharply in the future. Now that the $3T mark has been crossed for the first time at the beginning of 2022, it is towards the $5T mark by 2030 that all investors are looking at.
A prospect that should make the Oracle of Omaha and its investors at Berkshire Hathaway very happy.
Some reading
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