Warren Buffett’s holding company Berkshire Hathaway (BRK.A / BRK.B) sold half its Apple stock during the year’s second quarter.
The sale dramatically altered Berkshire Hathaway, where Apple previously accounted for 43% of the company’s $400 billion U.S. equity portfolio. The move was also a surprise given Buffett’s long-term-buy-and-hold approach as an investor and his frequent praise of Apple as a company.
Omaha-based Berkshire Hathaway disclosed in its Q2 earnings report that its holding of Apple stock was valued at $84.2 billion U.S. on June 30 of this year, suggesting that Buffett sold a little more than 49% of his stake in the tech giant.
The Apple sale comes as Buffett offloads other major positions in Berkshire’s portfolio, notably Bank of America (BAC) stock, which he has steadily sold in recent weeks.
In all, Buffett sold a little more than $75 billion U.S. of stocks during this year’s second quarter, pushing Berkshire Hathaway’s cash pile to a record $277 billion U.S.
Buffett, age 93, had trimmed his stake in Apple by 13% in this year’s first quarter amid signs that the company’s iPhone sales were slowing. However, Buffett said at Berkshire’s annual meeting in May of this year that the Apple sale was done for tax purposes.
However, analysts say the magnitude of Buffett’s stock sale in Q2 suggests that he has either soured on Apple’s stock or the stock market in general.
Buffett’s sale of Apple stock during Q2 came as the share price took off in mid-June after Apple unveiled its artificial intelligence (AI) strategy.
Apple’s stock rallied 23% off a mid-April low and was trading at a record high by mid-July of this year.
Buffett first bought Apple shares in 2016 after spending most of his career avoiding technology stocks. In recent years, he grew Berkshire’s stake in Apple to nearly $200 billion U.S.
As is often the case, Buffett’s stock moves look prescient with U.S. equity markets selling off sharply to begin August, and the tech-laden Nasdaq Composite index falling into a correction defined as a 10% decline from recent highs.
For the year’s second quarter, Berkshire Hathaway’s operating earnings, which include profits from the conglomerate’s fully owned businesses, rose due to strength in auto insurer Geico. Operating earnings totaled $11.6 billion U.S., up 15% from $10 billion U.S. a year ago.
Profit from BNSF Railway came in at $1.6 billion U.S., in line with last year’s number. Berkshire Hathaway’s energy business saw earnings fall nearly 50% to $326 million U.S.
Berkshire bought back $345 million U.S. worth of its own stock in Q2, lower than the $2 billion U.S. repurchased in each of the two previous quarters. Berkshire Hathaway’s Class B stock has risen 18% year-to-date and currently trades at $428.36 U.S. per share.
