If you\u2019ve been paying attention to Apple\u2019s stock price recently, you know that it has dropped significantly. Even Carl Icahn sold his shares as the media inundated investors with reports about a decline in iPhone sales, trouble in China, etc.\nBut there\u2019s one very important and notable investor who is known for backing up the truck when he sees a stock that is undervalued, and that\u2019s Warren Buffett. His company Berkshire Hathaway recently purchased one billion dollars worth of AAPL.\nNeil Hughes reports for AppleInsider:\n\nShares of AAPL were up nearly 2 percent in premarket trading on Monday after investors learned of Buffett\u2019s new stake. The shares, purchased as of March 31, are valued at about $1.07 billion, as noted by The Wall Street Journal.\nNews of Buffett\u2019s buy-in comes after activist investor Carl Icahn sold all of his shares in the company last month. Icahn said he still views Apple as a \u201cgreat company,\u201d but concerns over the Chinese economy and government led him to sell off his shares.\nBuffett\u2019s stake in Apple is noteworthy because Berkshire Hathaway has traditionally avoided technology stocks. Berkshare also boosted its position in IBM, quarterly SEC filings reveal.\nThough Buffett didn\u2019t previously own shares in AAPL, he did weigh in on the company in 2013, saying he thought Apple Chief Executive Tim Cook should buy back more shares and build value. At the time, he compared buying back shares of Apple to purchasing a dollar valued at 80 cents.\nMore at AppleInsider\n\nWarren Buffett has more credibility than Wall Street \u201canalysts\u201d\nI\u2019ve barked before about the idiot Wall Street analysts that take one or two data points about Apple out of context and then proceed to run down the company's stock. Most of these people don\u2019t know their asses from their elbows, and yet it seems that many investors listen to them.\nI\u2019ve often wondered if the analysts that do this are just part of an effort to short Apple\u2019s stock. I have no proof but the unrelenting negativity that they spew about Apple as a company makes me wonder if they have an ulterior motive. If you listen to these people you'd think that Apple was on the verge of bankruptcy, and that it was just a matter of time before the company closed its doors forever.\nWarren Buffett, on the other hand, has far more credibility than any analyst out there. He has run Berkshire Hathaway for so many years, and had such success that when his company buys a stock the purchase is often regarded as a strong vote of confidence about that company\u2019s future profits and growth.\nAnd that seems to be the case with AAPL. The stock popped up more than 2% after news of Berkshire Hathaway's billion dollar purchase hit the media.\nWhy did Warren Buffett buy Apple stock?\nBerkshire Hathaway\u2019s purchase of Apple stock makes me wonder just what motivated Warren Buffett to do it. What does he know about Apple as a company that others might be missing? There\u2019s no way to know, of course, unless Buffett makes some kind of public statement to explain his company\u2019s purchase of AAPL.\nOne reason might be Apple\u2019s recent dividend hike. The company currently pays a quarterly dividend of $.57 per share, and that\u2019s not an insignificant amount of money since Berkshire Hathaway now holds 9.81 million shares of Apple. That would give the company about $5.6 million in dividend payments each quarter.\nAs nice as the dividend payments are, I doubt that sort of money is what motivated Berkshire Hathaway to buy AAPL. That's really chump change to someone like Warren Buffett, so my guess is that he sees Apple has very undervalued and expects the stock to recover much of its real value at some point in the future. Thus Berkshire Hathaway will hold its 9.81 million shares, and get paid via dividends while it waits for Apple's stock to recover.\nWhatever the reasons behind Berkshire Hathaway\u2019s purchase, it will be very interesting to see if it pays off for the company. If I were to pick a winner in a fight between Wall Street analysts and Warren Buffett, my money is definitely on Buffett. They don't call him the "Oracle of Omaha" for nothing.\nDid you miss a post? Check the Eye On Apple home page to get caught up with the latest news, discussions and rumors about Apple.