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Warren Buffett walks inside to meet with Berkshire Hathaway shareholders before the annual shareholder meeting on May 3, 2024 in Omaha, Nebraska.
David A. Grogan
Warren Buffett’s Berkshire Hathaway Nearly half of the giant apple Last quarter’s moves were surprising for this investor, who is known for his long-term investments.
The Omaha-based conglomerate disclosed in its earnings report that its stake in the iPhone maker was worth $84.2 billion at the end of the second quarter, suggesting the Oracle of Omaha sold just over 49% of his tech holdings. Even after the sale, Apple remains Berkshire’s largest stock holding by far.
The sale of Apple shares comes as Buffett is in a broader selling pattern in the second quarter as Berkshire More than $75 billion in stocks were sold during this periodThis brings the conglomerate’s cash reserves to a record $277 billion.
Buffett reduced his stake in Apple by 13% in the first quarter. It was hinted at Berkshire’s annual shareholder meeting in May that this was for tax reasons. Buffett noted that selling “a little bit of Apple” this year would benefit Berkshire shareholders in the long run if the U.S. government raises capital gains taxes in the future to plug its widening fiscal deficit.
But the scale of the sell-off suggests it may be more than just a tax-saving move.
After falling in the first quarter on concerns that Apple was lagging in AI innovation, its stock surged in the second quarter, rising 23% to a new high, as Apple gave investors more details about its future in AI.
Why sell?
It’s unclear why Buffett, whose Apple stake was once so large that it accounted for half of Berkshire’s stock portfolio, would reduce his holdings of the stock he first bought eight years ago, whether for corporate reasons, market valuation or portfolio management considerations (Buffett generally doesn’t want a single holding to get too large).
apple
Before investing in Apple, the 93-year-old investor avoided technology companies for most of his career. Berkshire began buying Apple shares in 2016, influenced by Buffett’s investment lieutenants Ted Weschler and Todd Combs. Over the years, Buffett’s love for Apple has grown, and he has significantly increased his holdings in Apple, making it Berkshire’s largest stock, calling the tech giant The second most important business After the insurance company group he led.
Buffett has been selling off his top holdings like crazy lately. Buffett recently started reducing his second largest stock holding – Bank of Americareduced its holdings of bank stocks worth $3.8 billion The sales frenzy lasted 12 days.
Overall, the quarterly report showed that Buffett sold stocks last quarter, and the S&P 500 hit a record high, in anticipation of a “soft landing” for the U.S. economy. But this week, the prospect of a soft landing was questioned with the release of U.S. economic data on Friday. The July jobs report was weaker than expected.
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