Warren Buffett takes the floor before Berkshire Hathaway’s annual shareholder meeting on May 3, 2024 in Omaha, Nebraska.
David A. Grogen | CNBC
OMAHA, Nebraska – Warren Buffett’s Berkshire Hathaway has achieved gigantic results Apple in the first quarter, when the “Oracle of Omaha” further reduced his once favorite bet.
In its first-quarter earnings report, Berkshire Hathaway reported that its Apple bet was worth $135.4 billion, implying about 790 million shares. That would mean a share decline of around 13%. Apple was still Berkshire’s largest holding by far at the end of the quarter.
This is the second quarter in a row that the Omaha-based conglomerate has reduced its stake in the iPhone maker. In the fourth quarter, the company sold about 10 million shares of Apple (just 1% of its huge stake). Taking into account the change in Apple’s stock price, this filing would mean Berkshire sold about 116 million shares.
Buffett became a big fan of Apple after one of his investment managers, Ted Weschler or Todd Combs, convinced him to buy the stock years ago. Buffett even called the tech giant his second most important company after Berkshire’s insurer cluster.
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Many have speculated that the 93-year-old investment icon has reduced his favorite holding due to valuation concerns. Apple shares gained a whopping 48% in 2023 as megacap tech stocks led the market rally. At its peak, Apple surged in Berkshire’s stock portfolio, taking up 50% of it. The shares trade at more than 27 times expected earnings.
Shares of the iPhone maker got a big boost last week after the company announced that its board had approved $110 billion in stock buybacks, the largest in the company’s history. However, Apple saw a decline in overall revenue and iPhone sales. Shares have fallen more than 4% so far this year amid concerns about a revival in growth.
It’s not unprecedented that Berkshire’s CEO would adjust the Apple bet. He sold some of the shares in the fourth quarter of 2020, but Buffett admitted at the time that it was “probably a mistake.” Additionally, it is not usual for Buffett to reduce a position that has grown so large.
Even after the sale, Berkshire is still Apple’s largest shareholder outside of exchange-traded fund providers.
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2024-05-04 12:48:36
www.cnbc.com
