Buffett’s Berkshire Hathaway’s decision to significantly reduce its holdings of Apple shares in 2024 and 2025 has caused the investment giant to miss out on approximately $50 billion in paper gains.
On Monday, as the market rekindled optimism about the iPhone’s prospects, Apple’s stock price rose nearly 4% on Monday, and its market value rose to US$3.89 trillion, surpassing Microsoft to become the second largest company in the United States by market value. This round of strong gains makes Berkshire’s previous decision to reduce its holdings particularly eye-catching.
(Apple’s market value is nearly $4 trillion)
According to disclosures, as of June 30 this year, Berkshire’s Apple holdings have plummeted from 906 million shares at the end of 2023 to 280 million shares. Most of the sales occurred in the second quarter of 2024, with nearly 4 million shares reduced in the quarter. It is estimated that Berkshire’s decision to sell two-thirds of its Apple holdings will cost the company about $50 billion less.
This large-scale reduction of holdings seemed somewhat unexpected at the time, because Buffett once ranked Apple with Berkshire’s insurance, utility and railroad business (BNSF), calling it one of the four “pillars” of the company’s value. This had hinted that Apple might be Berkshire’s “permanent holding” like American Express and Coca-Cola.
High “opportunity cost”
According to Buffett’s disclosure in his 2021 shareholder letter, Berkshire’s initial average cost of buying about 1 billion shares of Apple stock was about $35 per share.
It is estimated that Berkshire sold Apple shares at an average price of about $185 per share, a deal that brought in more than $90 billion in pre-tax gains last year and about $6 billion so far in 2025.
However, Apple’s current stock price of nearly $262 is nearly $80 higher than Berkshire’s estimated average selling price. This means that Buffett’s “fly-selling” shares missed about US$50 billion in appreciation space.
In addition, this huge gain comes with high taxes. It is estimated that Berkshire will pay nearly $20 billion in corporate income taxes on the sale of Apple stock, or about $30 per share, which will reduce its net income to about $155 per share.
Why is Buffett selling?
There are many market interpretations of Buffett’s motivations for selling Apple shares.
Buffett himself hinted at Berkshire’s annual shareholder meeting in May 2024 that a possible increase in corporate tax rates is a consideration in the future.
Some Berkshire observers believe that the reduction is due to Apple’s excessive holdings. This investment once accounted for more than 40% of Berkshire’s stock investment portfolio. Through this reduction, Apple’s proportion has been reduced to about 25%, effectively diversifying risks .
There is also market speculation that Buffett hopes to further strengthen cash reserves before stepping down as CEO at the end of 2025 to consolidate the company’s already strong balance sheet . As of June 30, Berkshire held more than $330 billion in cash.
Given the strong performance of Apple’s stock price, Buffett cannot rule out the possibility of further reducing his holdings in the third quarter, and relevant data will be released in mid-November.
