Buffett surprises by slashing Berkshire’s Apple stake

OMAHA

Billionaire Warren Buffett slashed Berkshire Hathaway's massive Apple stake in a move that could prove unsettling for the broader stock market — both because the investor is so revered and because there had been little positive financial news lately.

Just two years ago Buffett called the stock one of the four giants of his conglomerate's business alongside Berkshire insurance, utility and BNSF railroad businesses that it owns outright.

That gave investors the impression that Buffett might hold onto Apple indefinitely.

However, he has trimmed the Apple stake over the past year and has recently also sold off some of his stock in Bank of America and Chinese EV maker BYD while doing very little buying.

As a result, Buffett is now sitting on nearly $277 billion in cash, up from what was already a record $189 billion just three months earlier.

“This could could alarm the markets especially given the news from last week” with weak tech earnings, a disappointing jobs report and uncertainty about the future of interest rates, Edward Jones analyst Jim Shanahan said.

Buffett did trim more than 10 percent of Berkshire's Apple stake in the first three months of this year when he sold off more than 116 million shares, but the sale disclosed on Aug. 3 was a much bigger move.

Wedbush tech analyst Dan Ives said he thinks “Buffett is a core believer in Apple and we do not view this as a smoke signal for bad news ahead.”

Ives thinks the recent tech sell-off is only a temporary distraction from the industry's long-term boom.

Berkshire didn’t give an exact count of its Apple shares in Saturday’s report, but it estimated the investment was worth $84.2 billion at the end of the second quarter. At the end of the first quarter, Berkshire’s Apple stake was worth $135.4 billion.

Shanahan estimates that Berkshire still holds about 400 million Apple shares.