Warren Buffett’s Berkshire Hathaway has made a surprising move by selling nearly half of its long-held stake in Apple during the second quarter of 2024. This significant reduction has left Berkshire with approximately 400 million Apple shares, valued at $84.2 billion. The sale is part of a larger trend of stock divestment by Berkshire, which sold a net $75.5 billion of stocks in the quarter.As a result of these sales, Berkshire’s cash reserves have swelled to a record high of nearly $277 billion. This substantial increase in cash holdings has raised questions about Buffett’s outlook on the current economic climate and stock market valuations. Cathy Seifert, an analyst at CFRA Research, commented, ‘If you look at the entire Berkshire picture and the macroeconomic data, a safe conclusion is that Berkshire is getting defensive’.Despite the massive sell-off, Buffett remains a fan of Apple, and the tech giant still represents Berkshire’s largest stock holding. Buffett has cited potential tax considerations as one reason for the sale, suggesting that reducing the Apple position could be advantageous for Berkshire shareholders should capital gains taxes increase in the future.Berkshire’s operating earnings for the quarter rose 15% to $11.6 billion, driven largely by improvements in its insurance businesses, including Geico. However, Buffett has consistently urged shareholders to focus on operating earnings rather than quarterly investment gains or losses when judging Berkshire’s performance.’We’d love to spend it, but we won’t spend it unless we think we’re doing something that has very little risk and can make us a lot of money,’ Buffett said at Berkshire’s annual meeting in May, referring to the company’s growing cash pile. This statement, coupled with the recent stock sales, suggests a cautious approach by Berkshire in the current economic environment.
Key points
- Berkshire Hathaway sold nearly half of its Apple stake in Q2 2024, reducing its holding to $84.
- Berkshire’s cash reserves reached a record high of nearly $277 billion following the stock sales.
- Despite the sale, Apple remains Berkshire’s largest stock holding, and Buffett cites potential tax considerations for the move.
- Berkshire’s operating earnings rose 15% to $11.
- The large cash reserve and stock sales suggest a cautious economic outlook from Buffett and Berkshire.
2 billion.
6 billion, driven by improvements in insurance businesses.
Contradictions👾While some sources report Berkshire selling ‘nearly half’ of its Apple stake, others specify a reduction from 790 million to 400 million shares, which is closer to a 49% reduction.
