Berkshire Hathaway Reduces Apple Holdings as Warren Buffett Adjusts Investment Strategy

Berkshire Hathaway, under Warren Buffett's leadership, has significantly reduced its Apple holdings for the fourth consecutive quarter, now valued at approximately $69.9 billion, down from a peak of $174.3 billion in late 2023.

This recent divestment saw a nearly 25% cut, leaving Berkshire with around 400 million shares, following an earlier quarter in which over a third of its Apple stake was sold. The total value of its Apple investment plummeted nearly $100 billion in two quarters.

This trend of reducing stakes isn’t limited to Apple; Berkshire also cut its investment in Bank of America by $9 billion. Overall, the conglomerate sold about $36 billion in equities in Q3, raising its cash reserves to an unprecedented $325.2 billion.

Analysts suggest that these moves may be driven by Apple’s premium valuation, currently trading at 31 times expected earnings, alongside concerns about potential capital gains tax hikes.

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Berkshire’s strategy appears to prioritize diversification, especially as Apple once represented half of its equity portfolio. In addition, the company has paused its share buyback program, spending only $345 million on repurchases in Q2 after previously investing $2 billion quarterly.

Despite these adjustments, Berkshire’s Class A shares have risen by 25% in 2024, outperforming the S&P 500’s 20% return, indicating a focus on preserving capital amid economic uncertainties. While Buffett’s sales may raise concerns about confidence in Apple, the tech giant remains Berkshire’s largest investment, reflecting its brand loyalty and market position.

Alexander Stefanov