Renowned American investor Warren Buffett’s Berkshire Hathaway company has reduced its stake in Apple Inc. during the first quarter, but Apple remains the company with the highest holdings in his portfolio.
On Saturday, May 4th, according to Berkshire Hathaway’s first-quarter financial report, the company held 790 million shares of Apple stock, valued at $135.4 billion. This marks a 13% reduction in Apple stock by Buffett’s company in the first quarter.
This is the second consecutive quarter that Berkshire Hathaway has reduced its holdings in the iPhone manufacturer. In the fourth quarter of 2023, it sold approximately 10 million shares of Apple stock, accounting for only 1% of its substantial holdings.
Excluding Apple’s stock price changes, this means Buffett sold about 116 million shares of Apple stock.
A few years ago, Buffett was persuaded by one of his investment managers to buy Apple stock, and he has since become a loyal fan of the company.
Buffett has even referred to this tech giant as his second most important business, second only to Berkshire’s insurance conglomerate.
Many speculate that the 93-year-old investment idol may have reduced his favorite Apple holdings out of valuation concerns.
Apple’s stock price surged by 48% in 2023. At its peak, Apple’s value in Berkshire’s stock portfolio reached 50% of its total portfolio value. The stock currently has a price-earnings ratio of over 27 times.
In the past week, after Apple announced its board had authorized a $110 billion stock buyback, Apple’s stock price has sharply risen.
This buyback is set to be the largest in Apple’s history. However, on the flip side, Apple’s overall sales and iPhone sales have both declined. Concerns about revitalizing growth have led to the stock dropping over 4% so far this year.
Buffett’s adjustment of his bet on Apple is not without precedent. He sold some shares in the fourth quarter of 2020, but Buffett admitted at the time that it “may have been a mistake.”
Nevertheless, Buffett’s reduction of a massive position is rare. Even after selling Apple stock, Berkshire Hathaway remains the second largest shareholder of Apple, apart from the exchange-traded fund providers.