In a striking move, Warren Buffett has dramatically scaled back his investment in Apple, one of the most notable selloffs by a prominent investor in recent history. Starting in the first quarter of 2024, Buffett’s Berkshire Hathaway sold approximately 510 million shares of the tech giant, reducing its stake by around 56%. This sudden reduction has sparked speculation about Buffett’s waning confidence in Apple’s future performance after an impressive seven-year growth trajectory that he expertly capitalized on.
Despite this significant cut, Apple continues to be Berkshire Hathaway’s largest equity investment, making up 41% of the conglomerate’s overall portfolio. At Berkshire’s annual meeting in May, Buffett’s enthusiasm for Apple remained apparent, as he referred to the company as “an even better” investment compared to his long-standing favorites, Coca-Cola and American Express, which he also praised as “wonderful” businesses.
Buffett has not publicly disclosed the reasons behind his decision to divest such a large portion of his Apple shares, leaving analysts and investors wondering if he will continue to hold a substantial position in the world’s most valuable company moving forward. However, the move is indicative of a more cautious approach from Buffett in an increasingly expensive market.
In the first half of 2024, Berkshire Hathaway sold off approximately $90 billion in stocks, with the sale of Apple shares accounting for a significant portion of this total. This strategy has resulted in an increase in Berkshire’s cash reserves, climbing from a previous record of $189 billion at the end of Q1 to $278 billion.
Additionally, in July, Berkshire bolstered its cash position further by selling around $4 billion worth of shares in Bank of America, which has been its second-largest holding in recent years. Like Apple, Buffett had purchased Bank of America stock at a low price, which turned out to be a highly profitable investment. With this new influx of cash, Buffett is now positioned to explore other investment opportunities that may offer potential similar to what Apple and Bank of America did in their early days.
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