HP stock surges as Warren Buffett’s Berkshire Hathaway acquires 11 percent of vendor

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HP stock surges as Warren Buffett’s Berkshire Hathaway acquires 11 percent of vendor

Warren Buffett and his legendary investment fund placed a huge bet on HP Inc. with a massive US$4 billion investment that gives Berkshire Hathaway an 11.4 percent stake.

SEC filings show Berkshire Hathaway increased its stake by 11 million shares since April, when a separate filing showed it owned 109.8 million HP shares. Buffett has been on an investment tear in recent weeks, floating another US$11.6 billion to buy insurer Alleghany and spending US$7.6 billion for a 14.6 percent stake in Occidental Petroleum.

HP stock shot up more than 15 percent to US$40.42 this week as news of the disclosure continued to excite investors on Thursday. Shares soared as much as 17 percent earlier in the trading day.

With the purchase, Berkshire Hathaway becomes the largest institutional investor in HP, beating out Vanguard Group’s 9.85 percent stake and Dodge & Cox’ 9.62 percent position.

CRN USA reached out to Berkshire Hathaway for comment. A spokesperson for HP Inc. said in a statement to CRN USA, “Berkshire Hathaway is one of the world’s most respected investors and we welcome them as an investor in HP Inc.”

The 91-year-old Buffett shows no signs of slowing down with his relatively new interest in tech investments. Berkshire Hathaway also owns 5 percent of Apple Inc. with a stake of US$157.5 billion, a US$1.8 billion stake in Amazon, and a US$1.8 billion position in data warehousing tech company Snowflake. Apple alone makes up almost half of Berkshire Hathaway’s massive portfolio, according to Hedge Follow.

The move shows a vote of continued confidence for the booming PC market. HP posted Q1 2022 revenues of US$17 billion, a year-over-year spike of 8.7 percent – mostly from its personal systems side of the ledger. The company continues to make bold moves, announcing last week it would scoop up global video conferencing giant Poly for US$3.3 billion (including Poly’s debt) in a bid to boost its hybrid office business.

“We view Berkshire buying HPQ shares as a positive that validates HPQ’s strategy/deep value,” wrote Evercore ISI tech analyst Amit Daryanani in a note to investors.

All of HP’s business moves benefit partners, HP CEO Enrique Lores told CRN USA during a call announcing its quarterly results. “We are a channel-oriented company,” Lores said. “We do the majority of our business in the channel and this is not going to change.”

This article originally appeared at crn.com

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