Warren Buffett reduced Apple stake, while other billionaires bought; conflicting views on investment attractiveness.

From Nasdaq: 2024-11-23 05:10:00

Warren Buffett’s Berkshire Hathaway has significantly reduced its stake in Apple, from over 905 million shares in 2023 to 300 million shares by the third quarter of 2024. This move contrasts with other billionaire investors buying Apple stock, raising questions about the company’s attractiveness as an investment.

Apple’s growth prospects are tied to new artificial intelligence features like Apple Intelligence, driving investor optimism despite modest sales growth. Wall Street analysts anticipate revenue growth of over 5% in fiscal 2025 and over 8% in fiscal 2026, with earnings per share expected to grow at nearly 10% annually.

Buffett’s decision to trim Berkshire’s Apple position may stem from the stock’s high valuation, with a P/E ratio of 37 compared to the S&P 500 average of 30. Other investors are betting on stronger earnings growth, while Buffett’s move could reflect a strategic shift towards building cash reserves under current market conditions.

For now, Apple remains a hold as it pushes into AI, potentially delivering upside surprises. The company’s loyal customer base and innovative products like Apple Intelligence may continue to drive growth, although concerns about valuation and future returns persist. Investors may explore other tech stocks with lower valuations for better prospects.



Read more at Nasdaq: Warren Buffett Unloaded More Apple Shares in Q3, but Other Billionaires Were Buying. Is It a Buy, Sell, or Hold?