Buffett trims Apple stock holding

A little

Warren Buffett’s Berkshire Hathaway has held Apple stock since 2016, with the stock holding increasing from 0.18% of the share outstanding to a high of 5.89% of all stock. However, Berkshire Hathaway have now sold 10 million shares.

This took Berkshire’s holding from 5.89% of the shares outstanding to 5.82% of the shares. This then increased bac to 5.86% of the shares outstanding after Apple did a stock buyback. This might not sound like much. But, it’s interesting and noteworthy given Warren Buffett’s hyper-bullish stance on apple, especially in relation to its stock buybacks.

Here, is what Warren Buffett had to say previously about Apple and buybacks:

So, what has changed? Why is Berkshire Hathaway repositioning it s apple stock holding.

First, Apples’ stock price has soared. Since January 2023, the stock price has increased 41%. Thus, it is prudent to take some profits, especially if you believe you have other investment opportunities that could generate higher returns going forward.

Second, Berkshire Hathaway might have decided that it is comfortable owning around 6% of the stock. Thus, as apple buys back stock, Berkshire Hathaway might trim some of those shares. For example, if the buyback pushes its holding up 0.1%, it might sell half that increase. In so doing, it still increases the stock holding but simply by slightly less.

Third, while Berkshire and Buffett might still be positive on Apple, they might be less bullish on Apple’s consumer and tech sector. Berkshire and Buffett tend to shy away from picking macro trends. However, they will fundamentally influence corporate strategy and influence things they do care about, such as cash flows and risk.

Apple faces some growth headwinds. The consumer is stretched. This has resulted in slightly disappointing sales despite reasonable profits. For example, the iPhone 15 sold 4.5% less than the iPhone 14 immediately after its release.

This includes Apple’s disappointing performance in China, where there are concerns about unemployment and deflation. Apple also faces some increased competition in China. In short, the growth story is not as strong as it once was.

At present, the Apple Vision Pro simply does not seem to have boosted sentiment. But, time could tell on it.

Analyst price targets have remained relatively consistent at around $199 per share. 58% of analysts have a buy recommendation. Now, looking at the time of the sales, which was around Q4 2024, we can see that apple was approaching that price target, which could have made it an attractive time to sell.