US-based multinational conglomerate Berkshire Hathaway has significantly reduced its stake in tech giant Apple, selling nearly half of its shares as part of a substantial selling spree.
The conglomerate, based in Omaha, Nebraska, reported net stock sales totalling $75.5bn during the second quarter.
Berkshire’s decision to cut its Apple investment comes despite Warren Buffett’s previous praise for the technology giant and its business model.
Since first reporting its Apple stake in 2016, Berkshire Hathaway has seen substantial gains from the investment, according to Bloomberg.
Initially spending $31.1bn for 908 million shares, the company’s remaining 400 million shares were valued at $84.2bn at the end of June.
In a note, Bloomberg Intelligence analysts Matthew Palazola and Eric Bedell said that Berkshire’s stock sales “are likely aimed at avoiding higher capital gains taxes, and profit harvesting may continue in some long-term positions.”
At the May shareholder meeting, Buffett stated that Apple is an “even better” business compared to American Express and Coca-Cola, two other companies in which Berkshire holds shares.
He mentioned that Apple is expected to continue being its leading investment.
The news of Berkshire’s reduced stake in Apple coincides with Apple’s latest financial results.
The Cupertino, California-based company reported a decline in sales to China, down 6.5% to $14.7bn, falling short of Wall Street’s $15.3bn projection for the third quarter.
Despite this, Apple’s net income rose to $21.4bn in the quarter that ended 29 June 2024, up from $19.88bn in the same period last year.
For the quarter ending 29 June, Apple posted total net sales of $85.77bn, an increase from the $81.79bn reported in the previous year’s quarter.
This growth was propelled by an increase in service revenues, which climbed to $24.21bn from $21.21bn, and a modest rise in product sales from $60.58bn to $61.56bn.
Apple’s board of directors has announced a cash dividend of $0.25 per share for the company’s common stock.
This dividend will be distributed on 15 August 2024, to shareholders who are on record as of the end of business on 12 August 2024.
