Warren Buffett walks the floor prior to Berkshire Hathaway’s annual shareholder meeting on May 3, 2024 in Omaha, Nebraska.
David A. Grogen | CNBC
OMAHA, Neb. — Warren Buffett’s Berkshire Hathaway shed a huge stake in Apple in the first quarter as the “Oracle of Omaha” continues to shrink his former favorite bet.
Berkshire Hathaway reported in its first-quarter earnings call that its bet on Apple was worth $135.4 billion, meaning about 790 million shares. If that happens, the stock would decline by about 13%. Apple remained Berkshire’s largest holding at the end of the quarter.
This is the second consecutive quarter that the Omaha-based conglomerate has reduced its stake in the iPhone maker. In the fourth quarter, it sold about 10 million Apple shares, or just 1% of its vast stock. The filing would mean Berkshire sold about 116 million shares, taking into account changes in Apple’s stock price.
Buffett has been a big fan of Apple since investment managers Ted Weschler and Todd Combs convinced him to buy the stock years ago. Buffett even called the tech giant his second most important business after Berkshire’s insurance companies.
Many have speculated that the 93-year-old investment icon has reduced his favorite stocks due to valuation concerns. Big tech stocks led the market rally, with Apple’s stock up a whopping 48% in 2023. At its peak, Apple ballooned into Berkshire’s stock portfolio, accounting for 50% of it. The company’s stock trades at more than 27 times forward earnings.
The iPhone maker’s stock price rose sharply over the past week after the company announced that its board of directors had approved a $110 billion stock buyback, the largest in company history. However, Apple recorded a decline in overall sales and sales of his iPhone. Shares have fallen more than 4% since the beginning of the year on concerns about how to restore growth.
It’s not unprecedented for a Berkshire CEO to adjust his bet on Apple. Buffett sold some of his shares in the fourth quarter of 2020, which Buffett admitted at the time was “probably a mistake.” It’s also unusual for Buffett to cut back on positions that have grown so large.
Even after the sale, Berkshire remains Apple’s largest shareholder outside of exchange-traded fund providers.
