In a surprising move at Berkshire Hathaway’s annual shareholder meeting this weekend, Warren Buffett, the famed “Oracle of Omaha,” revealed that his investment firm had trimmed its holdings in Apple, the iPhone maker, despite showering the company with compliments.
This news comes amidst a backdrop of headwinds for Apple, including a recent antitrust fine, slumping sales in China, and the scrapping of a long-term car project. The company’s share price is also down about 5% year-to-date.
However, despite selling some Apple stock, Warren Buffett didn’t hold back on his admiration for the company. He called the iPhone “one of the greatest products of all time” and reaffirmed that Apple, in his view, remains “even better” than other long-held Berkshire Hathaway positions like American Express and Coca-Cola.
So why the sell-off? It seems Warren Buffett is prioritizing building up Berkshire Hathaway’s cash reserves. The sale of Apple stock helped boost the company’s cash pile to a record $189 billion at the end of March. With interest rates and inflation uncertain, along with geopolitical tensions, Buffett seems content to stockpile cash for a potential buying opportunity. He even hinted that the cash hoard could reach a staggering $200 billion by the end of the quarter.
This move also saw Berkshire Hathaway completely exit its stake in Paramount Global, formerly known as ViacomCBS. The reasoning behind this decision wasn’t disclosed, but it frees up even more capital for Warren Buffett to deploy elsewhere.
While the Apple share sale might raise eyebrows for some investors, it’s clear that Warren Buffett’s faith in the company itself remains strong. Only time will tell how he chooses to utilize his growing war chest of cash.