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Warren Buffett's Berkshire Cuts Stake in Apple ... iPhone Maker to Buy Back $110 Bln worth of Shares

Sun 05 May 2024 | 10:09 PM
Taarek Refaat

Warren Buffett's Berkshire Hathaway cut its massive stake in Apple in the first quarter of the year, with the "Sage of Omaha" continuing to trim the size of his favorite bet.


In its first-quarter earnings report released on Saturday, Berkshire Hathaway said its bet on Apple was worth $135.4 billion, meaning about 790 million shares. This would represent a decrease of about 13% in the share. Berkshire's investment in Apple remains the largest in its portfolio at the end of the quarter.

This is the second straight quarter in which the Omaha-based group has reduced its stake in the iPhone maker. It sold about 10 million shares of Apple stock, only 1%, in the fourth quarter, and about 116 million shares in the first quarter of this year.

Buffett, while answering shareholder questions at Berkshire's annual meeting in Omaha, indicated that the sale was for tax reasons after achieving significant gains. He also indicated that the sale could be linked to his desire to avoid a higher tax bill in the future if interest rates rise to finance the ballooning US fiscal deficit.

Buffett became a huge fan of Apple after one of his investment managers, convinced him to buy the stock years ago. Buffett even described the technology giant as his second most important business after Berkshire's insurance group.

Many speculated that the 94-year-old investing icon reduced his preferred stake due to valuation concerns. Apple shares have gained a whopping 48% in 2023 as the big tech stocks led the market's rise. At its peak, Apple ballooned into Berkshire's stock portfolio, acquiring 50% of it. Shares trade at more than 27 times forward earnings.

But at the meeting, Buffett continued to praise Apple, saying it was "very likely" Apple would remain Berkshire's largest holding at the end of 2024.

The iPhone maker's shares got a big boost last week after the company announced that its board of directors authorized a $110 billion stock buyback, the largest in the company's history. However, Apple recorded a decline in overall sales and in iPhone sales. Shares have fallen more than 4% so far this year amid concerns about how to revive growth.

Even with the sale, Berkshire remains Apple's largest shareholder outside of ETF issuers.