OMAHA, Neb. (AP) – Billionaire Warren Buffett cut Apple’s largest stake in Berkshire Hathaway in a move that could prove volatile for the broader financial market – both because the investor is well-respected and because it was has had little good financial news lately.
Two years ago, Buffett named the stock one of his four biggest holdings along with Berkshire’s insurance, utilities and BNSF railroad businesses that it owns directly. That gave investors the impression that Buffett could hold on to Apple forever, just as he did with the Coca-Cola and American Express shares he bought decades ago.
However, he reduced his stake in Apple last year and recently sold his stock in Bank of America and Chinese EV maker BYD while buying less.
As a result, Buffett now has a net worth of $277 billion, up from a record $189 billion three months earlier.
“This could shock markets especially given last week’s news” about weak tech earnings, a disappointing jobs report and uncertainty about the future of interest rates, Edward Jones analyst Jim Shanahan said. .
Buffett has been praising Apple CEO Tim Cook, who attended Berkshire’s annual meeting in Omaha in May, and talked about how devoted consumers are to their iPhones and don’t like to change. . He created more than 10% of Berkshire’s Apple stake in the first three months of this year when he sold more than 116 million shares, but the sale revealed Saturday was a big step.
Wedbush technology analyst Dan Ives said in a research note that he thinks “Buffett is a core believer in Apple and we don’t take this as a smoke signal for bad news to come.” Apple remains the largest investment in Berkshire’s portfolio – more than double its holdings in Bank of America.
Ives says he thinks the latest technology sales are just a temporary setback to the industry’s long-term progress.
Berkshire did not provide the exact number of its Apple shares in Saturday’s report, but estimated that the investment was worth $84.2 billion at the end of the second quarter even though shares rose in the summer above $ 237.23. At the end of the first quarter, Apple’s Berkshire value was worth $135.4 billion.
Shanahan estimates that Berkshire still owns about 400 million shares of Apple.
However, when CFRA Research analyst Cathy Seifert said she views the sale of Apple as responsible portfolio management because the tech giant has become a large part of Berkshire’s holdings, it appears that Buffett is still prepare to collapse.
“This is a company that’s committed to a weak economy,” Seifert said.
Berkshire reported a slight decrease in its core earnings due to a decline in the value of its investment portfolio. The company said it earned $30.348 billion, or $21,122 per Class A share, during the second quarter. That’s down from $35.912 billion, or $24,775 per A share, last year.
Buffett has long warned investors that it’s best to look at Berkshire’s earnings when judging its performance because those numbers don’t include gains and losses on investments that can vary widely from quarter to quarter.
At that rate, Berkshire’s earnings grew more than 15% to $11.598 billion, or $8,072.16 per Class A share, from $10.043 billion, or $6,928.40 per Class A share, last year. Geico led Berkshire’s corporate recovery while many other economically sensitive companies reported mixed results.
The results easily topped the $6,530.25 earnings per share forecast by four analysts surveyed by FactSet Research.
Berkshire owns a number of insurance businesses as well as BNSF railroad, several major utilities and a diverse collection of retail and manufacturing businesses, including brands such as Dairy Queen and See’s Candy.
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