Berkshire sold 505 million shares of Apple in the first half of 2024 — that is nearly 56% of Buffett’s holdings. Should you follow the Oracle of Omaha and sell Apple stock?
In the first half of 2024, Berkshire sold 505 million shares — 115 million in the first quarter and another 390 million in the second quarter. That represents a 55.8% reduction in Berkshire’s Apple holdings as of June 30 since the end of 2023, Reuters noted.
Why? Should other investors follow suit? I do not know why Buffett sold such a huge chunk of Berkshire’s Apple stock.
However, Apple’s tepid growth rate suggests the famed investor may have concluded the stock’s prospects are not great.
While Apple’s AI offerings could give consumers a reason to upgrade, the iPhone maker’s declining revenues in China, its regulatory woes, and the absence of a compelling growth vector — particularly if Apple Intelligence does not prove to be a killer app — suggest Apple will be lucky to achieve low single digit revenue growth.
I suspect other investors will take a cue from Buffett.Buffett Has Sold A Chunk Of Berkshire’s Apple Stake
Apple has been a good investment. Since 2016, when Buffett began buying shares in the company, Berkshire has spent roughly $40 billion on the iPhone maker’s stock. Apple shares have delivered a total return of nearly 800% since Berkshire first disclosed its stake, noted the Financial Times.
Although Buffett has said nice things about Apple this year, his actions make me wonder whether the words were aimed at getting a higher price for his Apple shares.
How so? Buffett slashed Berkshire’s Apple stake 13% in the first quarter of 2024 and jettisoned another 49% in the second quarter, ending June with an Apple position worth $84.2 billion, noted the Wall Street Journal — citing Berkshire regulatory filings.
Buffett’s kind words for Apple came in May at Berkshire’s annual meeting. There he called Apple “an even better business” than two other large Berkshire Holdings — American Express and Coca-Cola, noted the Journal. At the meeting, he also alluded to tax rates as a reason to take profits in Apple.
Selling “a little Apple” this year would benefit Berkshire shareholders should the U.S. raise capital gains taxes in the future “to plug a climbing fiscal deficit,” he said, according to CNBC.Should You Follow Buffett And Sell Your Apple Stock?
This raises questions: Now that he has sold more than half his stake in 2024, was Buffett kidding when he referred to selling a “little” Apple? Is the possibility of future capital gains rate increases the real reason he sold so much Apple stock in the first half? Should you follow Buffett and dump your Apple stock?Reasons To Buy Apple Stock
The best reason to buy Apple stock is the company’s AI strategy — hinging on a revamped Siri digital assistant — which could motivate more people to upgrade their iPhones.
