Warren Buffett's Berkshire Hathaway (NYSE:BRK) (NYSE:BRK) has reportedly missed out on $23 billion profits by significantly reducing its stake in Apple Inc. (NASDAQ:AAPL) earlier this year.
What Happened: At the start of 2024, Berkshire held 905.6 million shares of Apple, valued at approximately $174 billion. However, during the first quarter, Berkshire sold 116.2 million shares, reducing its position by 13%. The second quarter saw an additional sale of 389.7 million shares.
By the end of the second quarter, the value of this stake had dropped to around $84 billion, a significant decrease from the potential $210 billion valuation at current market prices.
Business Insider revealed in an analysis on Monday that had Berkshire not offloaded its stake, it would have been worth about $210 billion at current prirce. Instead, Berkshire Hathaway's current stake in Apple was worth $84 billion at the end of the second quarter.
Based on average share prices in the first half of 2024, Berkshire sold its shares at an average price of $186.15 each. This price difference compared to Apple's current stock price resulted in the $23.1 billion in missed profits.
Why It Matters: The decision by Buffett to sell a significant portion of Apple shares reflects a strategic shift in his investment approach. In August, Buffett announced a pivot from Apple to other investments, including "magnificent" megacap stocks. This move was part of a broader strategy to diversify Berkshire Hathaway's portfolio, which has historically been heavily weighted towards Apple.
Despite the large sale, Berkshire still retains 400 million Apple shares, indicating continued confidence in the tech giant. The decision to sell was revealed in an SEC filing, which also disclosed new investments in companies like Ulta Beauty and Heico.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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