Close Menu
Invest Insider News
    Facebook X (Twitter) Instagram
    Wednesday, July 30
    Facebook X (Twitter) Instagram Pinterest Vimeo
    Invest Insider News
    • Home
    • Bitcoin
    • Commodities
    • Finance
    • Investing
    • Property
    • Stock Market
    • Utilities
    Invest Insider News
    Home»Investing»Apple Investors Urged to Stay Calm After Buffett Slashes Stake
    Investing

    Apple Investors Urged to Stay Calm After Buffett Slashes Stake

    August 5, 20245 Mins Read


    (Bloomberg) — To some, Berkshire Hathaway Inc.’s gutting of its Apple Inc. stake could be interpreted as a lack of conviction in the iPhone maker’s growth story. But many on Wall Street are urging investors to look past the news and stay calm.

    Most Read from Bloomberg

    The Warren Buffett-led conglomerate revealed Saturday that it sold almost half of its position in the tech giant during the second quarter. Its stake now stands at roughly $84 billion, down from about $140 billion at the end of March. The selling took place during a torrid run in the stock market that sent Apple shares 23% higher and pushed the S&P 500 from one record to the next.

    Since 2016, when Warren Buffett first disclosed its stake in Apple, its shares have soared almost 900% as the company cemented its grip on the industry, delivering Berkshire billions of dollars worth of unrealized profits along the way.

    “Buffett’s reduction of his Apple stake is merely about risk management,” said Joe Gilbert, senior portfolio manager at Integrity Asset Management. “If there were any concerns about the longer-term viability of Apple, Buffett would have exited the entire position. Similar to Berkshire’s other stock position reductions, Buffett has meaningful unrealized gains.”

    Berkshire’s portfolio reveal comes just days after Apple released its own quarterly results, which showed a return to revenue growth and signaled that new AI features will boost iPhone sales in the coming quarters. Apple shares were steady after the earnings report and ultimately ended the week higher despite the broader selloff.

    While the investment strategy of Buffett — long known as the Oracle of Omaha — is hard to ignore, Berkshire’s stake in Apple had gotten so large in recent years that some investors had begun to wonder whether the firm would have to trim its position to balance out its holdings. Even after the unwind, Apple remains Berkshire’s largest single position.

    “If you’ve got this outsized position you take some profits and you reduce some of your concentration risk,” said Cathy Seifert, a research analyst at CFRA. “They still have a fairly concentrated portfolio,” she added.

    Read: Berkshire Cuts Apple Stake by Almost Half in Selling Spree (2)

    It’s also not the first time Berkshire has cut its stake in Apple. At its annual meeting in May, the firm revealed that it had reduced its position during the first quarter of the year. At the time, Buffett hinted to investors that tax implications may have played a role in the sale.

    Representatives for Apple and Berkshire Hathaway didn’t respond to requests for comment outside of regular business hours on Sunday.

    The latest announcement comes amid broader concern about the potential of an economic downturn ahead. Worse-than-expected jobs data on Friday stoked fears the Federal Reserve may have waited too long to start reducing interest rates, sending the Nasdaq 100 Index into a technical correction and the Cboe Volatility Index toward 25.

    Megacap peers including Microsoft Corp., Amazon.com Inc. and Alphabet Inc. have all tumbled from record highs reached in early July. In total, Nasdaq 100 members have shed more than $3 trillion in value over that stretch with both Nvidia Corp. and Tesla Inc. each seeing declines of more than 20%. Apple, meanwhile, is down about 6% from its all-time high.

    It’s possible that Berkshire, like an increasing number of investors, wants to see more proof that Apple’s AI investments will pay off with revenue growth and isn’t convinced that’s happening fast enough, according to Brian Mulberry, client portfolio manager at Zacks Investment Management.

    Apple’s valuation multiple — at 33 times future profits as of mid-July — was 11 points higher than that of the broader S&P 500, a gap that was last seen in the aftermath of the pandemic and the financial crisis, data compiled by Bloomberg show. But despite the valuation premium, Mulberry thinks it still makes sense for investors to own Apple shares. “They’re still in a healthy balance sheet position and they’re still going to grow earnings faster than the broader market,” he said.

    Others, including Wedbush analyst Dan Ives, point to Apple’s brand loyalty and future growth – it’s on the cusp of what he thinks is a major upgrade cycle that will drive revenue growth in 2025 and 2026.

    “While some could read this as confidence worry, Apple just delivered a robust quarter with a massive AI driven super cycle ahead and we do not view this as the time to hit the exit button,” Ives said.

    Of course, Apple isn’t the only stake that Berkshire has trimmed lately — it’s been unloading shares of Bank of America Corp., cutting its position by 8.8% since mid-July. Some see that as a sign that Buffett doesn’t see any individual problems with either company, but is instead betting that the US consumer and broader economy are set to weaken.

    “Buffett may feel we’re about to go into a recession, so by raising cash now he will be able to buy companies cheap later on,” said Jim Awad, senior managing director at Clearstead Advisors. . “He may smell an opportunity coming.”

    —With assistance from Ryan Vlastelica, Subrat Patnaik and Natalia Kniazhevich.

    Most Read from Bloomberg Businessweek

    ©2024 Bloomberg L.P.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Previous ArticleGenpact and Advantage Solutions to Expand Collaboration to Boost Finance and Supply Chain Efficiencies for CPG and Retail Sectors
    Next Article Global stock markets fall sharply as worries grow over US recession

    Related Posts

    Investing

    Gold: Strengthening US Dollar, Growing Trade Deals Optimism Could Trigger Selling

    July 29, 2025
    Investing

    Can Portable Data Centers Keep America’s AI Lead Alive?

    July 29, 2025
    Investing

    EUR/USD: Rebounding US Dollar, Trade Optimism Could Set Stage for Deeper Pullback

    July 29, 2025
    Leave A Reply Cancel Reply

    Top Posts

    How is the UK Commercial Property Market Performing?

    December 31, 2000

    How much are they in different states across the US?

    December 31, 2000

    A Guide To Becoming A Property Developer

    December 31, 2000
    Stay In Touch
    • Facebook
    • YouTube
    • TikTok
    • WhatsApp
    • Twitter
    • Instagram
    Latest Reviews
    Property

    Estate agent reports 2025 York property market success

    February 15, 2025
    Property

    If property tax ballot measure passes, Grand Forks School District stands to lose up to $36 million – Grand Forks Herald

    October 26, 2024
    Property

    China Home Prices- July 15, 2024

    July 15, 2024
    What's Hot

    Bitcoin 200 000 $ cible toujours en jeu, motivé par ETF, Achat de trésorerie d’entreprise: Stanchart

    July 2, 2025

    CORRECTION – Tevogen Bio Reports Second Quarter 2024 Financial Results, Eliminates Doubt About Company’s Ability to Continue as a Going Concern, Eliminates Series B Preferred Shares

    August 15, 2024

    Le bitcoin passe à nouveau la barre des 100.000 dollars

    May 8, 2025
    Most Popular

    L’Asia Commercial Joint Stock Bank nomme Nguyen Khac Nguyen au poste de directeur général adjoint

    January 18, 2022

    PAGE 4 – Jackson-Madison County property transfers – sponsored by United Country McIver Land & Realty – WNWS Radio

    August 22, 2024

    Climate could force massive losses in property value amid migrations

    February 2, 2025
    Editor's Picks

    les pistes avancées par « Revue d’économie financière »

    May 10, 2025

    Stock Market Today: US Futures Rise Following S&P 500’s 6-Days Of Record Close—Boeing, P&G, Starbucks Earnings In Focus – Cadence Design Systems (NASDAQ:CDNS), Boeing (NYSE:BA)

    July 29, 2025

    Ce n’est pas de la volatilité, c’est une réinitialisation du marché obligataire en cours

    April 23, 2025
    Facebook X (Twitter) Instagram Pinterest Vimeo
    • Get In Touch
    • Privacy Policy
    • Terms and Conditions
    © 2025 Invest Insider News

    Type above and press Enter to search. Press Esc to cancel.