Buffett's Massive Investment in IBM (IBM)

Warren Buffett gave Wall Street a treat Monday by revealing his latest stock pick ahead of Berkshire's quarterly 13F filing.

Speaking on CNBC's Squawk Box, the Oracle said he bought 64 million shares of tech giant International Business Machines (NYSE: IBM), paying an average price of about $170 per share. Buffett now owns 5.5 percent of the shares outstanding.

IBM shares are trading just off all-time highs around $190 early Monday, giving Mr. Buffett a 12 percent paper gain.

Buffett highlighted the fact that IBM has been executing on its long-term strategy, welcomes massive share buybacks and is "honest with shareholders."

He said he has been reading IBM's 10-K filings for years, and said he was "hit between the eyes" by how the company finds and keeps clients. He said it is a big deal for a big company to change its IT support.

Buffett said IBM execs were not made aware of the purchase prior to this morning's announcement.

With Buffett notoriously avoiding tech stocks in the past, the move might have been a shock for many.

Shares of IBM are about 0.8 percent higher on the session.

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