OMAHA, Neb. — Investor Warren Buffett says his company bought about $10.7 billion of IBM stock this year, giving him a stake of more than 5 percent stake in the technology company.
Buffett revealed the new investment during an interview on CNBC Monday. Buffett’s company, Berkshire Hathaway Inc., will file a full quarterly update on its U.S. stock portfolio Monday afternoon.
Buffett has long refused to invest in high-tech companies because he has said it’s too difficult to predict which technology businesses will prosper in the long run.
But he said he recently changed his view of IBM based on what he read in the company’s annual reports and what he learned by talking to IT departments at Berkshire subsidiaries. He said he should have realized years sooner that the heart of IBM’s business is providing service and equipment to information technology departments.
“There’s a fair amount of presumption in many places that if you’re with IBM, you stay with them,” Buffett said.
So Berkshire bought about 64 million shares since March, or about 5.5 percent of IBM. Buffett says he believes IBM has a sound plan for the future.
IBM shares rose $1.78 to $189.16 in premarket trading after jumping as high as $190.55 earlier.
Buffett said Berkshire paid an average of about $170 per share for the IBM stock.
Berkshire’s investments are closely watched in the market because of Buffett’s successful record. Buffett has said that Berkshire has been buying aggressively during the recent market turmoil.
Buffett said Monday that Berkshire had been adding to its already sizeable stake in Wells Fargo, but he didn’t say how many more shares had been bought recently. At the end of June, Berkshire held 352.3 million Wells Fargo shares. That was up from 342.6 million shares Berkshire held at the end of March.
Monday afternoon’s filing with the Securities and Exchange Commission may not reveal a full picture of Berkshire’s investments because regulators often allow the Omaha-based company to conceal new investments for a time while building a position.
Buffett said that the third-quarter report that will be filed Monday won’t show all of Berkshire’s new IBM stake because some of the shares were bought in the fourth quarter.
Besides investments, Berkshire owns roughly 80 subsidiaries including insurance, railroad and utility firms.