Warren Buffett’s Berkshire Hathaway Continues Its Sell-Off of Apple Stock

On November 2, 2024, it was reported that Warren Buffett’s Berkshire Hathaway has further reduced its substantial investments in Apple Inc. stock. The company, based in Omaha, Nebraska, announced its third quarter results, revealing that it now holds a stake valued at $69.9 billion in Apple. This indicates that Berkshire has decreased its Apple holding by approximately 25% from the 400 million shares it had entering the third quarter.

At the conclusion of the previous year, Berkshire owned slightly over 900 million Apple shares. Despite the recent sell-off, Apple continues to be the largest stock holding for Berkshire Hathaway.

The decision to offload some Apple stock does not necessarily reflect a waning confidence in the technology giant, which has recently launched the new iPhone 16. In a statement made during his annual meeting in May, Buffett praised Apple, describing it as “an even better business” than two of his other major investments—American Express and Coca-Cola.

Some reports suggest that Buffett may have hinted at tax implications driving the choice to cut back on the Apple stake. This comes at a time when the U.S. is approaching a potential shift in its political landscape with the upcoming 2024 elections, which might bring changes in regulations impacting various sectors.

This year, Apple shares have seen a surge, up 16% and trading close to record highs, which might explain Berkshire’s strategy. Chris Bloomstran, president and chief investment officer of Semper Augustus Investments Group, articulated that the current trading price of Apple shares led Buffett to rethink the size of his position in the company.

Berkshire’s cash reserves have also reached a record high of $325.2 billion, including cash equivalents, positioning the company to pursue other acquisition opportunities. Earlier this year, Berkshire Hathaway's market value crossed the $1 trillion mark but has recently traded under that threshold.

Alongside the sale of Apple shares, Berkshire also trimmed its investment in Bank of America during the third quarter, with reports indicating continued reductions in October. As they had previously owned over 10% of the bank’s shares, Berkshire was obligated to quickly disclose their trades, but now that it owns less than 10%, the firm may delay revealing further sales until their next Form 13F filing in February.

In terms of earnings, Berkshire Hathaway posted a net income of $26.3 billion for the third quarter, translating to $18,272 per Class A share. This figure marks a recovery from the previous year's loss of $12.8 billion, or $8,824 a share. However, operating earnings have dipped to $10.1 billion from $10.8 billion from the prior year, attributed to lower performance in insurance underwriting impacted by estimated losses from Hurricane Helene. Berkshire also cautioned that its fourth-quarter results could be affected by losses from Hurricane Milton, ranging between $1.3 billion and $1.5 billion before taxes.

Stocks, Berkshire, Apple