Warren Buffett speaks before Berkshire Hathaway’s annual shareholder meeting in Omaha, Nevada, May 3, 2024.
David A. Grogen | CNBC
OMAHA, Nebraska — Warren Buffett’s Berkshire Hathaway has cut its gigantic Apple bet in the first quarter as the “Oracle of Omaha” continued to reduce its favorite bet.
In its first-quarter earnings report, Berkshire Hathaway said its bet on Apple was worth $135.4 billion, involving about 790 million shares. This would mark a drop of around 13% in participation. Apple was still Berkshire’s largest holding by far at the end of the quarter.
This is the second quarter in a row that the Omaha-based conglomerate has reduced its stake in the iPhone maker. He sold about 10 million shares of Apple stock (just 1% of his massive stake) in the fourth quarter. This filing, taking into account Apple’s stock price performance, would imply that Berkshire sold approximately 116 million shares.
The Oracle of Omaha became a big fan of Apple after one of his investment managers, Ted Weschler or Todd Combs, convinced him to buy the shares. Buffett even called the tech giant the second-largest business after Berkshire’s insurance group.
Apple
Many speculated that the 93-year-old investment icon had reduced his preferred stake due to valuation concerns. Apple stock has gained a whopping 48% in 2023, as mega-cap tech stocks have led the market rally. At its peak, Apple exploded into Berkshire’s stock portfolio, grabbing 50%. Shares trade at more than 27 times forward earnings.
Shares of the iPhone maker saw a sharp rise last week after the company announced its board had authorized $110 billion in stock buybacks, the largest in company history . However, Apple saw a decline in overall sales and iPhone sales. Shares have fallen more than 4% since the start of the year on concerns about how it would revive growth.
It’s not unprecedented for Berkshire’s CEO to adjust Apple’s bet. He sold some of his shares in the fourth quarter of 2020, but Buffett then admitted that it was “probably a mistake.” It is also not usual for Buffett to reduce a position that has become so large.
Even with the sale, Berkshire remains Apple’s largest shareholder outside of exchange-traded fund providers.
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