Charlie Munger (left) and Warren Buffett.
VCG | China Visual Group | fake images
hp stocks just had their best day in more than two years, and Warren Buffett’s Berkshire Hathaway is almost $650 million richer because of it.
Berkshire disclosed ownership of 121 million shares of HP, in a presentation with the Securities and Exchange Commission on Wednesday, making him the PC and printer maker’s largest shareholder, surpassing Vanguard.
Shares of HP rose 15% on Thursday after the disclosure, raising the value of Berkshire’s stake to $4.85 billion from $4.2 billion. It was HP’s biggest rally since the early days of the pandemic in March 2020.
The market’s quick reaction to Berkshire’s disclosed stake shows how much investors pay attention to what Buffett says and does. HP is now the second largest tech holding company in Berkshire behind Apple. Berkshire owns shares in the iPhone maker worth more than $150 billion.
Poor HP performance before the Berkshire disclosure
While Apple remains a steadily growing provider, HP is more of a value stock. Before Thursday, it was trading at about eight times future earnings, compared with a multiple of around 21 for the S&P 500 and 27 for Apple. And as of Wednesday’s close, HP shares were up 7.5% over the past year, trailing Apple’s 36% gain and the S&P 500’s 10% gain.
Buffett’s investment comes at an uncertain time for the PC market. Sales of laptops and desktops soared during the pandemic, buoying manufacturers including HP. But some market analysts now believe PC shipment growth to slow dramatically in the next year, and that demand has passed its peak.