- Berkshire Hathaway could cut its stake in Apple by 55% in the first half of 2024, missing out on $23 billion in profits.
- If Berkshire hadn’t reduced its position in Apple, its stock would be worth $210 billion at its current price.
- Apple stock has risen 10% since the second quarter on optimism about Apple Intelligence.
Berkshire Hathaway cut its position in Apple by 55% in the first half of 2024, even though the iPhone maker’s stock was trading at or near record highs.
Business Insider calculates that Warren Buffett’s conglomerate missed out on about $23 billion in profits as a result of Berkshire Hathaway’s sale of Apple stock in the first and second quarters of this year.
Berkshire Hathaway entered 2024 with a huge stake in Apple, holding 905.6 million shares worth about $174 billion at the time.
At current prices, that stock would be worth about $210 billion. Instead, Berkshire Hathaway’s current Apple stake was worth $84 billion at the end of the second quarter.
Berkshire Hathaway reduced its stake in Apple by 13% in the first quarter, selling about 116.2 million shares. It sold 389.7 million shares in the second quarter.
Since the second quarter, the iPhone maker’s stock has soared about 10%, hitting a high of around $232 per share as investors grow excited about the company’s Apple Intelligence technology driving hardware sales growth. Recorded.
Because it’s impossible to know the exact price at which Berkshire Hathaway sold its Apple stock, Business Insider used Apple’s average price in the first and second quarters as the selling price.
The calculations suggest Berkshire sold its 505.9 million Apple shares in the first half of 2024 at a weighted average price of about $186.15 per share.
The difference between the weighted average price and Apple’s stock price on Thursday offsets Berkshire Hathaway’s $23.1 billion in missed profits.
That’s not to say it was a bad deal on Berkshire’s part.
It’s nearly impossible to time perfectly the exit from such a large stock, and Berkshire’s Apple deal will go down as one of the best in history.
Berkshire began accumulating Apple stock in the first quarter of 2016, with an estimated average acquisition price of $39.59 per share, according to Hedgefollow data.
Since then, Apple stock has soared 485%.
What’s even more impressive is that Berkshire Hathaway began amassing huge stakes in tech giants at a time when it was already the world’s largest company by market capitalization.
Few investors except Mr. Buffett knew how big Apple could go from there.