Warren Buffett's company, Berkshire Hathaway, is making significant changes in its investments, particularly by selling shares of Apple and increasing its cash reserves to a record $325.2 billion.
In a quarterly report released on Saturday, Berkshire announced that it sold approximately 100 million shares of Apple during the summer, reducing its holdings by 25%.
Berkshire Hathaway's Strategic Shift
After this sale, the company still holds around 300 million shares of Apple, which remains its largest stock investment worth $69.9 billion. Buffett's decision to sell Apple shares is part of a larger trend; Berkshire has sold over 600 million Apple shares this year alone.
The recent sale is significant because it marks the eighth consecutive quarter in which the company has sold more stocks than it has bought. Overall, Berkshire sold $36.1 billion worth of stocks, while it made only $1.5 billion in new purchases during this period.
Notably, this quarter is the first since 2018 that Berkshire has not bought back any of its own shares. Cathy Seifert, an analyst at CFRA Research, shared her perspective on these moves. She stated, "Berkshire is a microcosm of the broader economy," suggesting that the company's actions reflect wider market conditions.
The large cash reserve indicates a cautious approach, and investors may be concerned about the implications for the economy.
While Berkshire's Class A shares have risen 25% this year, there are worries that many stocks may now be overpriced. Buffett's cash reserves have increased significantly, going from $276.9 billion at the end of June, highlighting the company's strategy to hold onto cash until a better investment opportunity arises.
Despite these sales, Apple continues to be a key asset for Berkshire. Buffett has praised Apple as a strong business and suggested that the decision to sell shares may have been influenced by potential future tax implications.
Analysts like Jim Shanahan from Edward Jones noted that the growing cash reserves raise questions about Buffett's outlook on the market, whether he sees stocks as overvalued, or if he is preparing for a significant acquisition, according to Reuters.
