Warren Buffett’s Berkshire Hathaway Continues to Sell Apple Stock, Hoarding Cash

Warren Buffett’s Berkshire Hathaway has been actively reducing its holdings in Apple Inc. over the past nine months, marking a significant shift in the conglomerate’s investment strategy. According to recent earnings reports, Berkshire Hathaway has sold approximately 600 million shares of Apple stock in 2024, which is about a quarter of its stake in the company.

This move is part of Buffett’s strategy to build up Berkshire’s cash reserves. As of the end of the third quarter, Berkshire’s cash on hand has surged to over $325 billion, up from around $277 billion at the end of the second quarter. Buffett has indicated that this decision is not a reflection of his confidence in Apple, but rather a response to the current market conditions and the lack of attractive equity opportunities.

Buffett also mentioned the potential for higher taxes on capital gains, which could be a motivating factor for the sale. Currently, the capital gains tax rate is 21%, but Buffett anticipates that this rate may increase due to current fiscal policies.

Analysts have offered various interpretations of this move. Some suggest that the sales began after the death of Charlie Munger, Buffett’s long-time partner, who may have been more comfortable with the Apple holdings. Others believe that the stake in Apple was becoming too large a portion of Berkshire’s portfolio, necessitating a rebalance.

Despite the sale, Apple remains Berkshire Hathaway’s largest investment, valued at around $70 billion, down from $174 billion at the end of the previous year. This adjustment reflects Berkshire’s broader strategy of managing its portfolio and maintaining liquidity in uncertain market conditions.