Berkshire Hathaway Inc., the conglomerate led by Warren Buffett, has made significant cuts to its stake in Apple Inc., reducing its holdings by almost 50%. This move is part of a massive second-quarter selling spree that has propelled Buffett's cash pile to a record-breaking $276.9 billion.

According to reports, Berkshire Hathaway sold $75.5 billion worth of stock on a net basis during the period, with operating earnings rising to $11.6 billion, up from $10 billion for the same period last year. The decision to reduce its stake in Apple comes as Warren Buffett was offloading shares amidst a rally in the S&P 500 stock index, which reached record highs in mid-July before undergoing a recent decline due to concerns of overblown artificial intelligence enthusiasm.

Analysts were surprised by the level of selling activity, with Jim Shanahan, an analyst at Edward Jones, stating, "This was a far higher level of selling activity than we were expecting." Berkshire Hathaway has also been scaling back its position in Bank of America Corp., currently its largest bank investment, reducing its stake by 8.8% since mid-July.

The decision to reduce holdings in Apple and Bank of America comes as Berkshire Hathaway struggles to find avenues to deploy its significant cash reserves. Share prices reaching new heights coupled with a stagnant deal activity have made it challenging for the conglomerate to make new investments. Warren Buffett has previously stated that he would only spend the cash when the risk is minimal and the potential returns are substantial.

In recent months, Berkshire Hathaway has turned to stock buybacks as a means to deploy its cash, although even that has become more challenging as the company's stock hit record levels. During the second quarter, Berkshire Hathaway repurchased approximately $345 million worth of its own shares, the lowest amount since the company adjusted its buyback policy in 2018.

Since first disclosing its stake in Apple in 2016, Berkshire Hathaway has profited immensely, with Warren Buffett accumulating a substantial paper profit. The conglomerate initially invested $31.1 billion for the 908 million Apple shares it held through the end of 2021. As of June this year, Buffett's approximately 400 million shares in Apple were valued at $84.2 billion.

Buffett, speaking at the May shareholder meeting, praised Apple as an "even better" business compared to other investments such as American Express Co. and Coca-Cola Co. However, he noted that tax issues played a role in the decision to trim the Apple stake, stating, "But I don't mind at all, under current conditions, building the cash position."

Bloomberg Intelligence analysts Matthew Palazola and Eric Bedell suggest that Berkshire Hathaway's stock sales are likely aimed at avoiding higher capital gains taxes, and they anticipate continued profit harvesting in some long-term positions.

Meanwhile, in other news related to Apple, the company recently reported a decline in sales to China by 6.5% in the third quarter, falling short of Wall Street's projections. Fears have resurfaced that Apple is losing ground in one of its most crucial overseas markets due to increased competition and the Chinese government's restrictions on foreign technology. Apple attributed some of the decline to the impact of a strong dollar and confirmed that its underlying business in China remains healthy despite the slowdown.

The reduction in Berkshire Hathaway's holding of Apple shares has raised speculation that Warren Buffett may not be done scaling back his stake. Edward Jones's Jim Shanahan suggests that selling the remaining stake is no longer far-fetched, stating, "I don't think zero's out of the question now."

Although it remains to be seen how the market will react to this news, the financial community will undoubtedly be watching closely for further developments from Berkshire Hathaway and its influential leader, Warren Buffett.

Note: The content of this article is based on the information provided by the user and does not reflect any independent reporting or verification.