Berkshire Hathaway, Warren Buffett's investment powerhouse, has purchased 64 million shares of Big Blue worth around $10.7 billion taking its total stake up to 5.5 percent, in what Buffett calls its biggest bet on the technology sector yet.
Through his astute investments Buffett has built up a personal fortune to become the world's third richest man, according to Forbes Rich List 2011.
Interestingly, Buffett claims that IBM had been unaware of his ambition to build a significant stake in the company, which may indicate that BH invested in IBM through third parties.
The shrewd investor said that he decided to invest in IBM after holding talks with unnamed technology executives. Another investment company, State Street Global Advisors, also owns the same percentage of shares in IBM.
IBM's share price has risen by one per cent in premarket trading and has gone up by around 17 per cent in total since Buffett started buying IBM shares back in March.
IBM's current CEO, Samuel Palmisano, is set to be replaced next year by Ginni Rometty, the second woman in less than a year to take the helm of a top tech company. Earlier this year, rival HP, named Meg Whitman as its CEO, following the exit of Leo Apotheker.