Warren Buffett's Berkshire Hathaway, $BRK.A, sold nearly half its stake in Apple
Warren Buffett’s Berkshire Hathaway sold off nearly half of its substantial Apple stake last quarter, a move that contrasts with the investor’s reputation for long-term commitment.
In its earnings report, Berkshire revealed that its Apple investment was valued at $84.2 billion at the end of the second quarter, indicating that Buffett reduced his position by just over 49%. Despite the sale, Apple remains by far Berkshire’s largest stock holding.
This sale of Apple shares is part of a broader trend of selling by Buffett. In the second quarter, Berkshire divested over $75 billion in equities, boosting its cash reserves to a record $277 billion.
Buffett had previously reduced Berkshire’s Apple stake by 13% in the first quarter and suggested at the annual meeting in May that this was for tax purposes. He explained that selling a portion of Apple this year could benefit shareholders in the long run if capital gains taxes are increased in the future to address a rising fiscal deficit.
However, the scale of the recent sale suggests there might be other reasons beyond tax considerations.
After experiencing a decline in the first quarter due to concerns about falling behind in artificial intelligence, Apple shares surged 23% in the second quarter to a new high as the company provided more details about its AI future.
The reasons for Buffett's decision to sell down Berkshire's Apple stake, which was first acquired over eight years ago, remain unclear. It could be related to company-specific issues, market valuation, or portfolio management concerns, as Buffett typically avoids letting any single investment dominate too much of his portfolio. At one point, Berkshire’s Apple holding was so large that it constituted half of its equity portfolio.