The 4% gain in Apple’s stock alongside an oil rally pushed the S&P 500 up nearly 1% and the Dow Jones up 1%.
Shares of Apple were beaten down following a weak second quarter earnings which revealed sales had flagged for the first time in 13 years. The results fanned fears that the iPad-maker would struggle to show growth in future quarters—driving shares of the company down to a two year low last week.
But Berkshire Hathaway’s new $1.07 billion stake in Apple, alongside Cooperman’s $24.7 million stake, was a glowing sign of confidence to many investors, taking the stock up over 4% in a single session. Both Berkshire Hathaway, led by Warren Buffett, and Cooperman’s Omega Advisors play by the principles of value investing: buy stocks undervalued by the market. Both also believe in holding on a company with long-term potential—which undoubtedly sat in the mind of some investors as a sign that Apple still has room to grow (granted Cooperman has also said Buffett is a superior investor).
Buffett, who has also generally avoided tech stocks, told the Wall Street Journal that his investment deputies, Todd Combs and Tom Weschler had made the purchase.
The question still remains however—is Apple a buy? Afterall, Buffett himself has warned against imitation trades, saying it doesn’t speak to a company’s fundamental ability to grow. Apple’s future will depend on what it has in the pipeline—and whether or not its team can create a product with massive profit margins to beat its own track record.