Warren Buffett is the world’s most famous investor and is renowned for his sober, long-term approach to the substantial equity stakes he takes in companies.

One of his best-known sayings about Berkshire Hathaway is, “Our favourite holding period is forever.”

It was therefore big news that Buffett quietly offloaded 20 million Apple shares, worth more than US$4 billion (A$6.2 billion), in the second quarter of the year. Especially as it came shortly after another significant trimming of Apple shares in the third quarter of 2024.

Many began wondering if Buffett had joined the growing number of bears who fear that Apple’s best days are behind it in a world increasingly dominated by AI.

While further sell-downs may signal Buffett is losing faith in Apple, it would be premature to draw any firm conclusions from recent moves.

Even after selling 20 million Apple shares, Berkshire Hathaway still owns another 280 million. Indeed, Apple remains Buffett’s single largest holding, accounting for about a fifth of Berkshire Hathaway’s US$268 billion (A$413 billion) portfolio.

Apple

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Buffett has famously avoided buying into technology companies, so many were surprised when he started buying Apple shares in 2016. At that time, he told a shareholder meeting that Apple should be seen less as a tech company and more as a powerful consumer brand with plenty of pricing power.

As Buffett himself has noted, he hasn’t switched to selling rather than buying because he’s worried about Apple’s future. Of recent moves, he’s stated his primary motivation is not having too many of Berkshire Hathaway’s eggs in Apple’s basket.

All that noted, the businesslike Buffett may still have decided that Apple shares are overvalued.

Cheviot portfolio manager Darren Pollack recently told the Financial Times, “The relatively high valuation is the driving force for Berkshire’s recent sales. The company isn’t growing at a rate that justifies such elevated valuations.”