In the first quarter of 2024, Berkshire Hathaway, led by renowned investor Warren Buffett, reduced its stake in Apple by more than 22%, as revealed in the conglomerate's latest quarterly filing. The investment in Apple, valued at $174.3 billion as of December 31, 2023, decreased to $135.4 billion as of March 31, 2024, marking a significant reduction of 22.3% Q/Q. Notably, this move attracted attention just ahead of Berkshire's annual meeting.

During the question-and-answer session at the annual meeting, Warren Buffett was asked whether his views on Apple's business and its attractiveness as an investment had changed since Berkshire first invested in the tech giant in 2016. In response, Buffett simply stated, "No." While he acknowledged the shares sold, he expressed confidence that Apple would likely remain Berkshire Hathaway's largest common stock holding.

Buffett also discussed the tax implications of the investment, revealing that Berkshire currently enjoys a federal tax rate of 21% on its gains from Apple. He emphasized that this rate was considerably higher in the past, reaching as high as 52%. Given the current fiscal policies, Buffett opined that higher taxes are quite likely. He further indicated that if they are paying taxes at a higher percentage in the future, shareholders would not mind the fact that Berkshire sold a portion of its Apple holdings this year.

In explaining his investment strategy, Buffett referred to Benjamin Graham's book, The Intelligent Investor, which focuses on value investing. Buffett views stocks as businesses and considers the market as a tool to serve investors, rather than dictate their decisions. He specifically praised American Express and Coca-Cola as "wonderful businesses," with Apple being an even better one. Buffett emphasized that unless there are significant changes to capital allocation strategy, Apple will remain Berkshire Hathaway's largest investment.

Berkshire's disclosure of its reduced stake in Apple comes just two days after the tech giant reported its fiscal second quarter 2024 results. Despite concerns about declining iPhone demand in China, Apple delivered better-than-expected numbers. Additionally, the company announced a massive $110 billion stock buyback program, the largest in U.S. corporate history.

The filing by Berkshire Hathaway revealed that approximately 75% of its equity investments are concentrated in five companies, with Apple being one of the key players. The other four firms and the changes in their stakes from the previous quarter include an increase in American Express' stake by 21.5% to $34.5 billion, Bank of America's stake by 12.6% to $39.2 billion, Coca-Cola's stake by 3.8% to $24.5 billion, and Chevron's stake by 3.2% to $19.4 billion.

Despite the reduction in its stake, Warren Buffett's confidence in Apple remains unwavering, indicating the continued significance of the tech giant within Berkshire Hathaway's investment portfolio.