Despite heavy – and rather ill-timed – selling that reduced Berkshire Hathaway’s Apple position and sparked talk of a shift under new CEO Greg Abel, the tech giant remains the conglomerate’s largest equity holding by far. At roughly 228 million shares worth about $60 billion (around 22% of the stock portfolio), Apple continues to deliver dividends, massive unrealized gains, and a subtle ownership boost from the company’s relentless share buybacks—showing the trim was about risk management, not a loss of conviction.
Micah Zimmerman for The Motley Fool:
Berkshire also sits on an enormous unrealized gain, since Berkshire’s cost basis is a fraction of today’s price, and the shares throws off a steady stream of dividends every year. Whatever the trimming implied, Apple is not a relic in this portfolio. It is the foundation.
Here’s the part that caught my eye. Apple spends tens of billions of dollars a year buying back its own stock, steadily shrinking the number of shares in circulation. That matters for Berkshire in a subtle but powerful way. Because the total share count keeps falling, Berkshire’s ownership percentage of Apple slowly rises even though it hasn’t bought a single new share. Its claim on Apple’s future profits quietly grows on autopilot.
Buffett has praised exactly this dynamic for years, calling it one of the reasons he loved the investment. He once compared it to your ownership of a business rising simply because your partners keep buying each other out. It means Apple keeps working for Berkshire in the background, compounding its stake without any action at all.
It is tempting to read the share sales as Berkshire’s loss of faith. I would read them differently. Apple’s position had grown so large that, at one point, it was worth more than everything else in the equity portfolio combined, a level of concentration that made even [Warren] Buffett uncomfortable. Trimming was about managing risk and locking in enormous gains at a rich valuation, not abandoning the thesis. Choosing to keep roughly $60 billion in Apple, rather than exiting entirely, is a statement of enduring conviction under Abel, not a goodbye.
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