Apple remains Berkshire Hathaway’s biggest holding despite 13% stake cut in Q1, current bet worth $135 billion

  • Berkshire Hathaway reported that its Apple bet was worth $135.4 billion, implying around 790 million shares. This marks a decline of around 13 per cent in the stake. Apple still remains Berkshire’s biggest holding by far at the end of the quarter.

Nikita Prasad
First Published4 May 2024, 07:48 PM IST
Warren Buffett, chairman of Berkshire Hathaway, is known as the Oracle of Omaha
Warren Buffett, chairman of Berkshire Hathaway, is known as the Oracle of Omaha

Warren Buffett’s Berkshire Hathaway has trimmed cut its massive stake in tech giant Apple Inc for the second straight quarter. In its first-quarter earnings report, Berkshire Hathaway reported that its Apple bet was worth $135.4 billion, implying around 790 million shares. This marks a decline of around 13 per cent in the stake. Apple still remains Berkshire’s biggest holding by far at the end of the quarter.

The value of Berkshire's stake in Apple fell 22 per cent to $135.4 billion as of March 31 from $174.3 billion at the end of 2023, even though the iPhone maker's share price fell just 11 per cent in the quarter. A large sale is an about-face for Buffett, who is normally tech-phobic but came to view Apple as a consumer goods company with strong pricing power and devoted customers. 

Also Read: Warren Buffet's Berkshire Hathaway Q1 operating profit rises 39% to $11.22 billion, net income drops 64% YoY

Some investors, however, have expressed concern that Apple consumed too much of Berkshire's investment portfolio. Apple CEO Tim Cook, who is at the Berkshire meeting, has said that he still considers it a privilege to have Berkshire as a major shareholder. Hathaway significantly reduced its stake in Apple as the company let its cash hoard swell to a record $189 billion.

At Berkshire's annual general meeting on Saturday, the billionaire assured the shareholders that “unless something dramatic happens that really changes capital allocation, we will have Apple as our largest investment.” He also said "I don't mind" expanding the cash stake, in light of alternatives in equity markets and conflicts around the world, and said cash could top $200 billion by the end of June. 

Also Read: Berkshire Hathaway AGM: Warren Buffet outlines roles of successors, pays tribute to Charlie Munger

He added that Berkshire remains committed to the US. “We will be American oriented," Buffett said. "If we do something really big it’s extremely likely it will be in the United States.” Berkshire's stock is up 23 per cent over the last year, lagging the Standard & Poor's 500's 25 per cent gain. Over the last decade, the stock has risen 218 per cent compared to the S&P's 172 per cent gain.

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. The billionaire investor later supercharged the investment as he warmed to the technology company, and he spent tens of billions of dollars buying its stock.

Berkshire Hathaway Q1 Results

The sales leave Warren Buffett with more than six times the minimum $30 billion cash cushion he has pledged to keep. Berkshire realized $11.2 billion of after-tax gains in the quarter from selling investments. Berkshire Hathaway Inc announced its first quarter results on Saturday, reporting a record quarterly profit, boosted by a significant increase in income from insurance underwriting.

The first-quarter operating profit rose 39 per cent to $11.22 billion, or about $7,807 per Class A share, from $8.07 billion a year earlier. The multinational conglomerate's income fell to $12.7 billion in the quarter-under-review, or $8,838 per share, from $35.5 billion, when Berkshire had large unrealized gains from its stocks. Today's shareholder meeting is the first since Charlie Munger, Buffett's longtime friend and business partner, died in November 2023 at age 99.

Apple Q1 Results

Apple shares jumped seven per cent on Friday after the iPhone maker increased its cash dividend by four per cent and authorized a $110 billion stock buyback plan. The buyback is the largest in the company's history. Friday's stock gain added nearly $200 billion to Apple's market capitalization, lifting it to $2.86 billion, second only to Microsoft, worth $3 trillion. Apple said the fiscal second-quarter revenue dropped four per cent to $90.8 billion, beating Street estimates.

With inputs from Bloomberg, Reuters

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First Published:4 May 2024, 07:48 PM IST
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