FX.co ★ Apple Stock Falls After Berkshire Cut Its Stake By Nearly Half

On Monday, Apple Inc. (AAPL) witnessed a 4% decline in its share price following news that Warren Buffett’s investment firm, Berkshire Hathaway, had divested nearly half of its stake in the company. This significant sale involved approximately 390 million Apple shares, translating to a net value of $75.5 billion, thereby boosting Berkshire Hathaway’s cash reserves to around $276.9 billion.

Despite such a sizable sale, Berkshire Hathaway retains roughly 400 million Apple shares, now valued at $84.2 billion, down from approximately $140 billion at the end of March. This development coincided with Apple's quarterly results release.

Jim Cramer, host of CNBC’s Mad Money, attributed Buffett’s decision to Apple's challenges in China. He shared on social media platform X (formerly known as Twitter) that “Warren crushed Apple and the story is being viewed as 'China risk'.” This divestment follows Berkshire’s earlier disclosure during the May meeting about reducing Apple holdings in the first quarter, with Buffett alluding to potential tax implications.

Bloomberg Intelligence analysts Matthew Palazola and Eric Bedell observed in a report that Berkshire’s stock sales likely intended to sidestep higher capital gains taxes, leading them to believe the firm might continue profit-taking strategies concerning specific long-term investments.

Apple shares had previously surged by 23% in the three months leading to June, hitting an all-time high on July 16, fueled by investor optimism over new AI technologies enhancing the company's sales. However, Bloomberg News reported on July 28 that Apple's anticipated AI features would launch later than planned, delaying the new iPhone and iPad software updates to allow for additional bug fixes.

Currently, AAPL is trading on the Nasdaq at $210.76, a decline of 4.14% or $6.10 per share. Over the past 52 weeks, the stock has traded between $164.08 and $237.23.