Apple Stock Falls After Berkshire Cut Its Stake By Nearly Half

(RTTNews) - Apple Inc. (AAPL) shares are down by 4% on Monday as news emerged that Warren Buffett's investment firm, Berkshire Hathaway, had sold nearly half of its stake in the company. This transaction resulted in Berkshire Hathaway divesting approximately 390 million Apple shares, equivalent to a net value of $75.5 billion. Consequently, Buffett's cash reserves increased to about $276.9 billion.

Despite the significant divestment, Berkshire Hathaway still holds approximately 400 million Apple shares valued at $84.2 billion, marking a substantial decrease from the approximately $140 billion valuation at the end of March. This development coincided with the release of Apple's quarterly results.

Jim Cramer, the host of CNBC's Mad Money, suggested that Buffett's decision might have been influenced by Apple's challenges in China, as he shared in a post on social media platform X (previously known as Twitter), stating, "Warren crushed Apple and the story is being viewed as 'China risk'." This reduction in Apple holdings follows Berkshire's disclosure during the May meeting that it had reduced its Apple holdings in the first quarter, with Buffett hinting at potential tax implications.

Analysts from Bloomberg Intelligence, Matthew Palazola and Eric Bedell, highlighted in a report that Berkshire's stock sales were likely aimed at avoiding higher capital gains taxes and suggested that the firm might continue to engage in profit-taking activities regarding specific long-term investments.

Apple's shares had surged by 23% in the three months leading up to June and had reached an all-time high on July 16, driven by investor optimism about new AI technologies boosting the company's sales. However, Bloomberg News reported on July 28 that Apple's upcoming AI features were expected to launch later than initially planned, resulting in delays in the release of its new iPhone and iPad software updates, allowing more time for bug fixes.

AAPL is trading on the Nasdaq at $210.76, down 4.14% or $6.10 per share. It has traded between $164.08 and $237.23 in the past 52-week period.