Warren Buffet's Berkshire Hathaway Buys 5.5 Percent Share in IBM

Investment mogul Warren Buffett has accumulated a 5.5 percent stake in tech giant IBM - a move that marks a newfound embrace of the technology sector for the 81-year-old billionaire.

Buffett and his company Berkshire Hathaway have long been reluctant to invest in high-tech firms, arguing that it is too difficult to predict which companies and innovations in the industry will succeed in the long-run.

The about-face came after reading IBM's annual reports and talking to IT departments at various Berkshire subsidiaries, The Associated Press reports. Accordingly, Buffett has purchased 65 million shares in the company since March, equating to roughly $10.7 billion in stock.

"IBM, however, has done a great job of transitioning itself focus on the more profitable software and services businesses, which now represent about 75 percent of sales, making it less of a technology company than it was in the past," reports Lindsey Bell for The Street.

The news, which Buffett broke in an interview with CNBC Monday morning, sent IBM shares soaring. Berkshire's third-quarter report, to be filed this week, will not show all of the company's new IBM stake, as some of the shares were bought in the fourth quarter.