Shares of Apple (AAPL +1.18%) got bruised on Monday, slipping as much as 10.9%. As of 11:59 a.m. ET, the stock was still down 3.7%.
The major market indexes were all under pressure Monday, partially the result of a carry trade rout sparked by a rate hike by the Bank of Japan. However, Apple had its own problems, as one of the company's biggest proponents sold a huge block of stock.
NASDAQ: AAPL
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Say it ain't so, Warren!
It's no secret that Berkshire Hathaway CEO Warren Buffett has long been a fan of Apple stock. Since Berkshire's first investment back in 2016, Buffett has been a celebrated Apple bull, with the consumer electronics giant representing Berkshire's biggest equity holding.
Reports emerged over the weekend that Buffett continued to unload Apple shares, continuing a trend that began earlier this year. The celebrated investor sold an additional 390 million shares of Apple stock in the second quarter, adding to the 115 million shares sold in Q1.
In all, Berkshire has sold more than half its stake in Apple, but that only tells part of the story. Buffett has been on a selling spree of late, selling roughly $76 billion in stocks last quarter, and bringing Berkshire's cash hoard to a record $277 billion, according to The Wall Street Journal.
The devil is in the details
There's no denying the continued selling suggests that the so-called Oracle of Omaha has soured on Apple, but the sales require context. When Berkshire first sold a tranche of Apple stock in the first quarter, he suggested the move was made for tax purposes. Buffett said he expects corporate tax rates to be higher in the future, noting that the company is paying a 21% tax rate this year, and it might be "a little higher percentage later on."
In fact, at Berkshire's annual shareholder meeting back in early May, Buffett said it was "extremely likely" Apple stock would continue to be Berkshire's largest position to close out 2024.
It's important to note that even after the massive sale, Apple is still Berkshire's largest stock holding by a wide margin, worth roughly $84 billion as of market close on Friday. That's still more than double its stake in Bank of America at $41 billion.
With all respect to Warren Buffett, I believe Apple stock is still a buy.
