Buffett Slashes AAPL Stake in Half, What’s Really Going On?, Removing the Buffett Overhang
Hello everyone. What a busy start to the week.
My initial thoughts on Apple’s earnings were sent to all you via email last Friday. We are going to take an unexpected detour to focus on Warren Buffett news that came out over the weekend. There is still much to talk about regarding Apple’s 3Q24 earnings release and conference call – we only touched upon the big picture takeaway. We will shift back to earnings review mode tomorrow.
Earlier today, a judge ruled against Google in the Google Search vs. U.S. trial. This was the trial that involved Google's default search deal with Apple. We will talk more about the development after I have had time to read through the 286-page ruling. For now, we can point back to the following daily updates regarding the topic:
October 11th, 2023 (U.S. vs. Google, Apple in the Crosshairs, Satya Nadella Cries Wolf)
October 16th, 2023 (Apple as a Search Trojan Horse, My Estimates for Google TAC Payments to Apple, Potential Court Impact on Apple Search Revenue)
Let’s jump in.
Buffett Slashes AAPL Stake in Half
Back in May, Berkshire Hathaway disclosed that it had trimmed its Apple stake by 115M shares (about 13% of its Apple holdings) in 1Q24. Berkshire, Apple’s largest single shareholder, had sold very small amounts of AAPL in the past. A 13% cut in three months was different.
Over the weekend, Berkshire reported 2Q24 earnings and 10-Q. While the company doesn’t break out its stock purchases and sales in 10-Qs, there is enough disclosure found in the document to assesses major portfolio shifts ahead of the quarterly 13-F filings (which will provide granular data on buys and sells).
In CY2Q24 (April to June), Warren Buffett sold approximately 50% of Berkshire’s remaining Apple stake. That brings the total reduction in the Apple stake to 58% versus the end of 2023. As of quarter end, Berkshire’s AAPL stack was worth $84 billion.
The 50% reduction is obtained using the following numbers:
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