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Warren Buffett’s Berkshire Hathaway further trims Apple stake in Q1
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Berkshire Hathaway sold off a significant number of Apple shares, as the company’s stake fell 22% to $135.4 billion as of March 31. However, Apple was still Berkshire’s biggest holding by far at the end of the first quarter.
Warren Buffett’s Berkshire Hathaway continued to reduce its stake in tech giant Apple for the second straight quarter.
Berkshire sold off a significant number of Apple shares, as the company’s stake fell 22% to $135.4 billion, implying around 79 crore shares.
Apple was still Berkshire’s biggest holding by far at the end of the first quarter.
Explaining the reason behind reducing stake in Apple, Buffett said it was for tax reasons following sizable gains on the investment and not any judgement of his long-term view of the stock.
The Oracle of Omaha also suggested it could be tied to his view that tax rates may possibly be going higher to fund a ballooning US fiscal deficit.
“It doesn’t bother me in the least to write that check — and I would really hope with all that America’s done for all of you, it shouldn’t bother you that we do it —and if I’m doing it at 21% this year and we’re doing it a little higher percentage later on, I don’t think you’ll actually mind the fact that we sold a little Apple this year,” he added.
Buffett further said that it’s “extremely likely” that Apple will remain the largest holding at his conglomerate despite the recent slowdown in sales.
In a regulatory filing describing its US-listed stock holdings at the end of 2023, the Omaha-based conglomerate said it sold about 1 crore Apple shares (just 1% of its massive stake) in the fourth quarter, but still owned more than 905 million shares worth about $174 billion at the time.
Buffett’s sprawling conglomerate, which owns the BNSF railroad and Geico insurer, first invested in the iPhone maker in 2016 at the direction of one of his two investment deputies: Todd Combs and Ted Weschler.
Buffett later supercharged the investment as he warmed to the technology company, and he spent tens of billions of dollars buying its stock.
This isn’t the first time Berkshire, which began investing in Apple in 2016, has pared back some of its holdings in the tech company.
In the second half of 2020, the company sold off about $11 billion worth of the stock, a move that Buffett, 93, later said was “probably a mistake,” in a shareholder meeting.
Apple on Thursday reported a 10% year-over-year decline in iPhone sales, leading to a 4% drop in total revenue. But the stock had its best day since late 2022 on Friday due largely to a $110 billion stock buyback plan and increased margins that result from a growing services business.
Shares of Apple settled about 6% higher on Friday. Even after Friday’s rally, the stock is down 1.23% in 2024, while the Nasdaq is up 9.42%.
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