Berkshire Hathaway Sells Nearly Half of Its Apple Stake

In a surprising move, Warren Buffett’s Berkshire Hathaway has significantly reduced its stake in Apple, selling nearly half of its shares in the tech giant in the latest quarter. The unexpected move comes from an investor known for his long-term commitments.

At the end of the second quarter, Berkshire’s holdings in Apple were valued at $84.2 billion, indicating that Buffett had sold off just over 49% of his position. Despite this substantial sell-off, Apple remains the largest single stock holding in Berkshire’s portfolio.

The divestment is part of a broader trend by Buffett, who sold more than $75 billion in stocks during the same period, pushing Berkshire’s cash reserves to a record $277 billion.

Earlier this year, Buffett reduced his Apple stake by 13%, citing tax considerations as the main reason. At Berkshire’s annual meeting in May, he mentioned that selling “a little bit of Apple” could benefit shareholders if capital gains taxes were to rise in the future. However, the size of the recent selloff suggests there may be other factors at play.

Apple shares rebounded significantly in the second quarter, rising 23% as the company provided more information about its AI strategy. The recovery followed a decline in the first quarter due to concerns about the pace of AI innovation.

The exact reasons behind Buffett’s decision to sell such a large portion of Apple stock remain unclear. It could be related to business strategy, market valuation, or portfolio management principles, as Buffett generally prefers not to let a single holding dominate his portfolio. At one point, Apple accounted for half of Berkshire’s stock holdings.

Buffett, who is 93, initially avoided technology companies for much of his career. However, influenced by his associates Ted Weschler and Todd Combs, Berkshire began buying Apple stock in 2016. Over the years, Buffett has significantly increased his Apple holdings, making it Berkshire’s largest stock investment and often referring to it as his second-largest business after insurance.

Buffett has also recently trimmed his positions in other top stocks. He sold $3.8 billion worth of Bank of America shares after a 12-day sell-off.

Overall, Berkshire’s latest quarterly report showed a substantial share selloff during a period when the S&P 500 hit record highs, fueled by optimism for a “soft landing” for the U.S. economy. However, that optimism was challenged by a weaker-than-expected July jobs report.