Despite posting a record quarterly operating profit, Buffett has reportedly soured on stocks and chosen to let the conglomerate's cash reserves soar to nearly $277 billion. One notable action taken by Berkshire was the sale of a large chunk of its stake in Apple, with approximately 390 million shares sold in the second quarter alone.

The decision to sell Apple shares comes as the tech giant's stock price rose by 23% during that period. However, Berkshire still holds around 400 million Apple shares worth $84.2 billion as of June 30. The increase in cash holdings at Berkshire can be attributed to the net sale of $75.5 billion worth of stocks in the second quarter. Strikingly, this marks the seventh consecutive quarter in which Berkshire sold more stocks than it bought.

Berkshire Hathaway's second-quarter profits, driven by its numerous businesses, climbed by 15% to an impressive $11.6 billion, which translates to approximately $8,073 per Class A share. A significant portion of this profit came from the underwriting and investments in Berkshire's insurance ventures. However, it is worth noting that the net income for the quarter actually dropped by 15% to $30.34 billion due to the rising stock prices that boosted the value of Berkshire's investment portfolio, including Apple.

Throughout his tenure, Buffett has consistently advised shareholders to overlook the quarterly investment gains and losses reported by Berkshire, as they often lead to distorted net profits or losses. The conglomerate typically accumulates cash when suitable businesses or individual stocks cannot be found at fair prices. Therefore, this substantial cash stake held by Berkshire might also signal concerns about the broader US economy, as many investors perceive the company as a proxy for the economic climate.

In light of recent government data indicating a slowdown in job growth and the highest unemployment rate since October 2021, analysts are projecting multiple Federal Reserve rate cuts starting in September. However, Berkshire's returns from short-term treasuries are expected to decline once these rate cuts come into effect. Moreover, Berkshire's own stock repurchasing activity has slowed down, with just $345 million repurchased in the second quarter and no repurchases during the first three weeks of July.

Warren Buffett has been vocal about his desire to deploy Berkshire's cash, but only if it involves minimal risk and the potential for substantial returns. Buffett sees long-term value in Apple, praising the company's strong pricing power and loyal customer base. He expects Apple to remain Berkshire's largest stock investment, despite the recent sale of shares. The decision to sell was partly influenced by the anticipated increase in the federal tax rate on gains.

Warren Buffett, now 93 years old, has been at the helm of Berkshire Hathaway since 1965, transforming it into a conglomerate encompassing a wide range of businesses. However, there are speculations that vice-chair Greg Abel, currently 62, might eventually succeed Buffett as Berkshire's chief executive. With his notable investment decisions and sage advice, Buffett's moves continue to draw significant attention from investors and financial analysts alike.