Apple Inc. (AAPL): Among Billionaire Bruce Berkowitz’s Stock Picks with Highest Upside Pot
May 9, 2025
We recently published a list of Billionaire Bruce Berkowitz’s 6 Stock Picks with Highest Upside Potential. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against other billionaire Bruce Berkowitz’s stock picks with highest upside potential.
One of the most prominent hedge fund managers on Wall Street and founder of Fairholme Capital Management, billionaire Bruce Berkowitz’s track record and unique investing approach make his portfolio choices well worth a closer look. Berkowitz is renowned for his bold bets on unloved assets, his high-conviction investment style, and his rare ability to spot dollar bills being sold for pennies- and the guts to hold them until the market catches up.
His ability to focus on facts and ignore the market chatter has helped him deliver strong results and earned him strong accolades in the industry. Named Morningstar’s Domestic-Stock Fund Manager in 2009 and Institutional Investor Magazine’s Money Manager of the Year in 2013, his honors underscore his reputation as a value investor worth following.
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Berkowitz has always believed in owning a handful of stocks. These stocks, however, are those in which he believes deeply. After all, high-conviction investing is the name of the game.
“You only need a few ideas in a lifetime to do unbelievably well.”
He is also a staunch believer in reality. Hated assets usually have hidden value, and the trick, he believes, is to look at the facts instead of reacting to trauma like others do.
“Ignore the crowd. Count what matters.”
In an interview with Bill Brewster from the Business Brew, Bruce Berkowitz talked about how he started Fairholme with a simple mission: managing his family’s money. From the very beginning, Fairholme wasn’t a marketing organization. Rather, the fund’s unique approach was vested in value creation rather than asset gathering. Focusing solely on deep research and concentrated positions, Berkowitz often ran portfolios with only a few ideas.
Over the years, Berkowitz learned how financial metrics, on which he relied with much conviction in the early years, weren’t the only factors to consider. Rather, management quality and ownership culture were equally important. This shift in perspective has made him more selective as he strongly believes that the right leadership can make or break an organization, particularly during tough times. That said, Berkowitz highlighted in the interview how he now avoids doing business with executives he doesn’t trust, regardless of how shiny the financials may seem.
Moreover, Berkowitz’s investments are almost entirely US-focused. The sole reason for this strategy has been his commitment to deep understanding and control. According to him, sound investing requires a good grasp of the company’s regulatory environment, tax structure, supply chain, and other related factors. Building that level of expertise made him limit his universe to the US, where he is comfortably focused on a few three to six positions where he tries to fully understand the industry, the competitors, the suppliers, and more. According to him, the US is a sound market to operate in, especially for a value investor dreaming of capital appreciation and preservation.
“His aptitude for picking stocks sets him apart from his peers, and Fairholme’s portfolio is filled with attractively priced firms that generate high free cash flow. Berkowitz’s strategy has led to a stellar long-term record, and his large cash stakes have helped limit volatility.”
For this list, we picked stocks from Fairholme Capital Management’s 13F portfolio as of the end of the fourth quarter of 2024. We listed them in the ascending order of analysts’ average upside potential, as of May 9. These equities are also popular among other hedge funds. The hedge fund data is as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A wide view of an Apple store, showing the range of products the company offers.
Fairholme Capital Management’s Stake: $601,008
Number of Hedge Fund Holders: 166
Average Upside Potential: 20.01%
Apple Inc. (NASDAQ:AAPL) is a technology company. Like many other stocks, Apple has also been facing tariffs and overall macroeconomic uncertainty. The company recently reported fiscal second quarter earnings that beat Wall Street expectations, with sales up 5.1% year on year to $95.36 billion, while non-GAAP profit of $1.65 per share was 1.7% above analysts’ consensus estimates. Despite earnings beating consensus estimates, Apple’s services revenue of $26.65 billion for the quarter came in below the expected $26.70 billion.
According to CEO Tim Cook, Apple saw “limited impact” from tariffs in its March quarter because of supply chain optimization. However, he estimated that tariffs would add $900 million in costs for the current quarter, but that he remained “confident” looking ahead. On May 5th, Morgan Stanley reiterated the stock as “Overweight” and said that it remains range-bound for now. It also said that it believes Apple’s efforts to diversify production outside of China are working.
“The fact that Apple only faces $900M of tariff costs in the June Q, despite being over-indexed to China, shows SE Asia production diversification is working. That said, mgmt wasn’t able to provide any segment-level guidance for the June Q (not even Services, which they effectively always do), couldn’t commit to how much Product would come from India/Vietnam in the September quarter and beyond (leaving the tariff cost impact open-ended), didn’t address pricing or other tariff mitigation tools, and didn’t provide an updated timeline for the new Siri introduction.”
Overall, AAPL ranks 4th on our list of billionaire Bruce Berkowitz’s stock picks with highest upside potential. While we acknowledge the potential of AAPL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AAPL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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