Could Warren Buffett's Favorite Stock Double Your Money in 5 Years?

Warren Buffett has many favorite stocks , ones that have played an important role in his portfolio for years and that have helped the billionaire deliver market-beating returns over time. Buffett, as chairman and chief executive officer, has led Berkshire Hathaway to a compounded annual increase of nearly 20% over 59 years. That's compared to the 10% compounded annual gain for the S&P 500 over that time period. Buffett chooses companies that he believes have solid competitive advantages and that can withstand the test of time. The investing giant aims to invest for the long term, so he looks for companies that may excel for years to come. And he aims to get in on them at a reasonable price. I consider the following stock Buffett's favorite as it holds a special place in his portfolio: the top spot. Clearly, the company is a solid investment -- but could it double your money in five years? Let's find out. Image source: The Motley Fool. Taking a bet on technology Buffett first bought shares of this player back in 2016, taking a bet on an industry he usually doesn't invest in -- technology. This stock is Apple ( AAPL +0.17%), seller of the famous iPhone, Mac, and other leading devices. Buffett surely noticed Apple's fantastic moat, brand strength that keeps customers coming back. Over time, this has driven revenue and profit growth and stock performance, too. Buffett is so grateful for these results that he thanked Apple CEO Tim Cook during the latest Berkshire Hathaway shareholders meeting back in May. Apple stock has advanced about 900% since Buffett initially bought the shares. Buffett in recent quarters cut his position in Apple, and though he didn't spell out the reason, it's possible that the movement was simply to lock in gains after such a solid performance. Meanwhile, the fact that Apple remains his biggest holding shows he still believes in the company's prospects. NASDAQ: AAPL Key Data Points An $8 trillion market value Now, let's consider whether this Buffett stock could double your money in five years. To do so, the stock price would rise to about $550, bringing the stock's market cap to $8.1 trillion. Let's do some math, involving the company's sales growth, to imagine the path to this level. From Apple's actual 2023 sales of $383 billion through analysts' average estimates for $482 billion in annual sales next year, Apple has delivered a compound annual growth rate (CAGR) of 5.9%. And the stock trades for just under 10x sales . A CAGR of 5.9% from 2023 through 2030 would imply annual revenue advancing to $610 billion by the end of that period. And revenue at that level would bring Apple to a price-to-sales ratio of 13, higher than it's ever traded in the past. AAPL PS Ratio data by YCharts Considering a market value of $8.1 trillion, to maintain a PS ratio of about 10, Apple would have to reach $800 billion in annual sales by 2030, suggesting a...

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