In the second quarter of 2024, Warren Buffett’s Berkshire Hathaway unexpectedly reduced its stake in tech giant Apple by nearly 50%, as revealed in the company’s earnings report. The value of Berkshire Hathaway’s holdings in Apple dropped from $84.2 billion to 400 million shares, down from 790 million shares previously. This move is surprising as Buffett is known for his strategy of holding onto stocks for extended periods of time. Apple did not respond to requests for comment on the matter.
This is not the first time that Berkshire Hathaway has decreased its stake in Apple, a company with a market cap exceeding $3.3 trillion. In the last quarter of 2023, the firm sold off 10 million shares of Apple stock, amounting to approximately 1% of its holdings in the company. Furthermore, in the first quarter of 2024, Berkshire reduced its stake in Apple by 13%. These strategic moves indicate that Berkshire Hathaway may be changing its investment approach towards the tech giant.
Despite the reduction in its Apple holdings, Berkshire Hathaway reported a record cash pile of nearly $277 billion for the second quarter, a significant increase from the $189 billion in cash and equivalents it reported in the first quarter. The conglomerate sold off $75.5 billion in stock during the second quarter, including cutting its stake in Bank of America to $41.1 billion, its second-largest position after Apple. This emphasis on cash holdings and stock sales suggests a shift in Berkshire Hathaway’s investment strategy.
Berkshire Hathaway’s earnings report also revealed that a majority of its aggregate fair value is concentrated in five companies, including the aforementioned Apple and Bank of America. The other top holdings are American Express ($35.1 billion), Coca-Cola ($25.5 billion), and Chevron ($18.6 billion). These positions indicate the diversified nature of Berkshire Hathaway’s investment portfolio, with a significant portion of its value tied to a select group of companies in different industries.
Overall, the unexpected reduction in Berkshire Hathaway’s stake in Apple signals a potential shift in Warren Buffett’s investment strategy. The conglomerate’s significant cash reserves and divestment of stock holdings suggest a reevaluation of its investment priorities. As Berkshire Hathaway continues to adjust its portfolio, the market will be closely watching to see how these changes impact its performance and future investment decisions.
