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Warren Buffett wants Apple to spend its cash buying more Apple shares, not on megadeals

Buffett bought a big slug of AAPL earlier this year. Now Apple is doing the same thing. Good idea, Buffett says.

Warren Buffet
Warren Buffet
Alex Wong / Getty
Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

Apple has an enormous amount of cash sitting around — $267 billion, at last count — which perpetually prompts armchair analysts to suggest ways the company should spend its money — Netflix is doable for $140 billion. Tesla only costs $50 billion!

That’s dumb, says Warren Buffett, the world’s best-known investor. Apple should spend its cash buying Apple shares — just like Warren Buffett.

Not a coincidence: That’s Apple’s plan.

The Berkshire Hathaway CEO, who makes a point of saying he doesn’t understand technology, now owns a large slug of Apple stock. And he says he likes Apple’s plan, announced last week, to spend $100 billion buying its own shares.

It’s a better idea, he says, than spending that money on other companies, which have the disadvantage of not being Apple.

“They’re not going to find $50 billion or $100 billion acquisitions that they can make at remotely a sensible price that really become additive to them,” Buffett said today at Berkshire’s annual meeting/fanfest.

Then again, he said, “They may find it. Who knows.”

Buffett’s comments came a day after he announced that Berkshire had acquired another 75 million shares of Apple, which caused Apple shares — and his five percent stake in the company — to increase by 4 percent in a day. Which is nice work if you can get it.

Below is a clip of Buffett’s comments, unless you’re reading this on a platform that doesn’t allow this type of embedded clip.

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