Renowned investor Warren Buffett announced at Berkshire Hathaway Inc.'s annual meeting in Omaha that he had reduced his stake in Apple Inc. Despite the sale, Buffett praised Apple as an exceptional company. Berkshire's share in the tech giant amounted to $135.4 billion at the end of the first quarter, down from $174.3 billion at the year-end.

Buffett, speaking to a crowd of thousands in Omaha, stated that Apple remains an outstanding investment and is even better than American Express and Coca-Cola, two other businesses Berkshire owns. He described the iPhone as one of the greatest products of all time. He attributed the sale of Apple shares to potential tax implications.

Apple has faced various challenges lately, including a $2 billion antitrust fine, declining sales in China, and the discontinuation of its long-term car project. The company's shares have been down about 5% this year. Despite these setbacks, Buffett expressed his confidence in Apple's resilience and potential.

The sale of the Apple stake bolstered Berkshire's cash pile, which reached a record $189 billion by the end of March. Buffett stated that given current market conditions, where rate cuts are uncertain and geopolitical risks persist, he welcomes amassing additional cash. He estimated that the cash pile could potentially reach $200 billion by the end of the quarter.

Berkshire's cash accumulation has also been aided by higher interest rates, resulting in $1.9 billion of interest income in the first quarter, compared to $1.1 billion the previous year.

Buffett's inability to find sizable acquisition opportunities recently has contributed to the growth of the cash hoard. Berkshire shareholders perceive this as a sign that Buffett holds a bearish view of the stock market. Chief Investment Officer at Smead Capital Management, Bill Smead, stated that Buffett is unlikely to deploy the funds unless there is a chance to buy an entire company or a major market sell-off of 30% or more occurs.

In addition to the Apple stake reduction, Berkshire reported several key highlights from its annual meeting and earnings report. Berkshire's diverse collection of businesses, which includes manufacturers, home builders, insurance companies, and retailers, generated $11.2 billion of operating earnings, representing a 39% increase compared to the previous year.

Improved results in Berkshire's insurance businesses contributed to this increase, with the auto-insurer Geico reporting pre-tax profits more than doubling to $1.93 billion. Berkshire's railroad unit BNSF, however, reported an 8.3% decline in earnings due to unfavorable changes in business mix and lower fuel surcharge revenues.

Furthermore, Berkshire's subsidiary PacifiCorp is facing significant losses from wildfires that occurred in Oregon and California, with an estimated $2.4 billion in probable pre-tax liabilities. At the end of the first quarter, damages sought by plaintiffs reached approximately $7 billion, and an additional claim of $30 billion was recently filed.

The absence of Charlie Munger, Buffett's long-time business partner who passed away last year, cast a somber tone over the meeting. Buffett reminisced about their close relationship, referencing the fun they had together even in the face of failed ventures. Buffett repeatedly assured shareholders that Berkshire's future is secure under the leadership of Greg Abel, the appointed successor, and Ajit Jain, the vice chairman of insurance operations.

Overall, Warren Buffett's decision to reduce his stake in Apple while expressing confidence in the company's potential grabbed attention at Berkshire's annual meeting. The sale has boosted Berkshire's cash reserves, leaving investors speculating about future acquisitions and signaling Buffett's cautious stance on the stock market.