Buffett’s attraction to Apple has always gone far beyond its dividend. The company’s strength lies in an ecosystem that encourages customers to remain within its hardware, software and services platform for years. An iPhone buyer may later add a Mac, Apple Watch, iCloud storage, subscriptions or App Store purchases, creating recurring revenue streams with economics that differ significantly from one-time hardware sales.
The latest results reinforce that argument. Apple’s fiscal third quarter of 2026 generated $109.4 billion in revenue, up 16% from a year earlier, while diluted EPS rose 29% to $2.02. Quartz reported that it was Apple’s strongest June quarter on record, a point also confirmed by Apple’s own earnings release.
Apple has also been widening the ecosystem toward more price-sensitive customers. The MacBook Neo, an entry-level laptop starting at $599, gives first-time Mac buyers a significantly cheaper route into Apple’s platform. MacRumors reported on the launch, while Apple has confirmed that the model starts at $599 and uses the A18 Pro chip.
The company has also introduced new financing options intended to lower the upfront cost of joining the ecosystem. Apple Upgrade, launched with Klarna, allows customers to finance products including the iPhone, iPad, Mac and Apple Watch through monthly payments. CNBC reported that Mac plans begin at $24.99 per month, giving Apple another mechanism for attracting customers who might otherwise choose a lower-cost competing device.
The buyback math that actually helps dividend investors
Critics of Apple as an income investment often point to the enormous amount of capital directed toward share repurchases rather than dividends. Apple spent tens of billions of dollars buying back stock over the past year, and its total share count has fallen dramatically since the early 2010s, according to The Motley Fool.
That does not necessarily work against dividend investors. When a company reduces its share count, the same amount of profit is spread across fewer shares, mechanically supporting earnings per share. It also means that future dividend increases can be financed across a smaller shareholder base, giving management additional flexibility even if overall profit growth slows.
Apple raised its quarterly dividend by 4% to $0.27 per share earlier this year and simultaneously authorized another $100 billion of share repurchases. The Motley Fool discussed the move, while Apple’s own announcement confirms both figures.
The modest headline yield therefore tells only part of the capital-return story. Apple combines a growing dividend with one of the largest buyback programs in corporate America, creating a structure where shareholders can benefit from both direct cash distributions and a steadily shrinking share count.
Wall Street still expects room for growth
Wall Street analysts continue to price in further earnings growth, particularly as investors assess the next iPhone replacement cycle and Apple’s AI strategy.
Goldman Sachs raised its Apple price target to $370 ahead of third-quarter earnings while maintaining a Buy rating. Bank of America analyst Wamsi Mohan has a $380 target based on 37 times his calendar 2027 EPS estimate of $10.32.
Morgan Stanley has separately projected fiscal 2027 earnings per share of $10.23, around 7% above the broader Wall Street consensus, citing potential share gains and higher average selling prices heading into the next product cycle, according to TheStreet.
Why earnings growth matters more than the starting yield
For a traditional high-yield stock, investors often focus primarily on the current income stream. Apple offers a different proposition: a low starting yield backed by growing earnings, substantial free cash flow and persistent reductions in the number of shares outstanding.
That means the investment case depends less on whether today’s yield looks attractive and more on whether Apple can continue increasing earnings and returning capital over many years. For long-term investors, the compounding effect can matter more than the initial payout percentage.
What Berkshire’s continued bet on Apple signals
Berkshire has reduced its Apple position substantially since the end of 2023, largely as the investment grew into an unusually large portion of the conglomerate’s portfolio. Even after those sales, however, Apple remained Berkshire’s largest equity holding at the end of June 2026.
Public filings show Berkshire held approximately 227.9 million Apple shares worth about $66 billion at quarter-end, representing roughly 22% of its reported U.S. equity portfolio. That placed Apple comfortably ahead of American Express and Coca-Cola.
The Motley Fool reported that Berkshire’s continued ownership remains significant even after years of trimming. Another Motley Fool analysis highlighted the extraordinary size of the remaining position.
Buffett repeatedly described Apple as an exceptional business during his tenure as Berkshire CEO. Under new CEO Greg Abel, Berkshire has continued to hold the position at a scale that suggests Apple remains strategically important rather than merely a residual investment.
What this means for Apple investors
Apple will never win a simple dividend-yield comparison at around 0.4%. Investors seeking immediate income can easily find stocks offering several times that level, but Apple’s attraction lies elsewhere.
The company has continued raising its dividend, aggressively reducing its share count and expanding an ecosystem that generates recurring revenue across hardware, services and subscriptions. Berkshire’s decision to retain Apple as its largest equity holding even after substantial sales reinforces the idea that the investment case rests on durable business economics and long-term capital returns rather than headline yield alone.
For dividend-growth investors, Apple offers an unusual profile: low income today, but significant capacity for future payout growth if earnings continue rising and the share count keeps shrinking. The obvious risk is valuation, because a premium-priced stock leaves less room for disappointment if growth slows or investor expectations reset.
Apple’s dividend story is therefore not about collecting a large check today. It is about whether a highly profitable company can continue compounding earnings per share, shrinking its equity base and gradually increasing the cash distributed to each remaining shareholder.
