Following the investment moves of billionaires isn't a foolproof strategy, but it can help inform your own decisions, as many of the top investors have gotten wealthy through their stock-picking abilities.
It shouldn't come as a surprise that Apple (AAPL +0.01%) is a popular stock to own among billionaires. The iPhone maker is once again the most valuable company in the world, with a market cap of $3.4 trillion. That's one reason the stock is appealing to the wealthiest investors. Many of them run hedge funds worth tens or even hundreds of billions of dollars, so they need to invest in companies that are big enough to move the needle.
Another is that Apple enjoys substantial competitive advantages thanks to its installed base of roughly 2 billion devices, dominant brand name in consumer electronics, and high-margin business like its App Store, which typically allows the company to collect 30% of money spent inside the apps.
However, some investors seem to be turning bearish on the stock based on 13-F filings. Let's take a look at the top billionaire-led hedge funds that sold the stock in the second quarter.
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1. Warren Buffett's Berkshire Hathaway
Berkshire Hathaway's sale of Apple was its biggest move in the quarter and surprised a number of Buffett watchers.
The Berkshire chief has long sung the praises of Apple, calling it his company's third business at one point, and complimenting the company on the strength of its businesses. Buffett hasn't directly addressed the reasons for the second-quarter Apple stock sale, in which Berkshire sold roughly 400 million shares of Apple, or $80 billion of the stock, slashing its stake in half.
In earlier comments, Buffett hinted that tax concerns were a reason for the sale. With talk in Washington about raising the capital gains tax rate, Buffett seems to have taken the opportunity to lock in Berkshire's massive gains in Apple, avoiding the risk of capital gains taxes going up.
Buffett has also been raising cash by selling other stocks, a sign according to some that he may believe the stock market is overvalued.
2. David Shaw's D.E. Shaw
Billionaire David Shaw's D.E. Shaw hedge fund has long been a major shareholder in Apple, counting as a top holding for more than a decade. That investment has paid off handsomely over that time, as Apple is up roughly 10x.
However, D.E. Shaw decided to trim that stake in the second quarter, selling 4.8 million shares of Apple, worth roughly $10 billion, leaving the company with 10 million shares of Apple.
It's unclear why Shaw sold the stock in the second quarter, but the firm may have believed that the stock had gotten overvalued after a run-up in the second quarter.
Apple is still D.E. Shaw's second-biggest holding, just behind Microsoft.
3. Jeff Yass's Susquehanna International
Finally, the third billionaire who sold Apple stock in the second quarter was Jeff Yass.
Yass is known for holding a massive stake in TikTok. His Susquehanna firm is known for its quantitative approach.
Susquehanna sold 2.6 million shares of Apple in the second quarter, worth roughly $500 million. That left Susquehanna with 6.2 million shares worth around $1.3 billion.
Susquehanna's current portfolio is built around options positions in high-profile stocks, and its biggest stock holding is the S&P 500 SPDR ETF.
NASDAQ: AAPL
Key Data Points
Should you sell Apple?
Apple stock is pricey at the moment, trading at a price-to-earnings ratio of 33, and the jury is still out on Apple Intelligence, which is yet to be released to the public. Apple's Glowtime event, during which it launched the iPhone 16, also failed to excite investors, as the stock finished Sept. 9 essentially flat.
However, selling Apple stock seems like an overreaction at this point, especially with a potential sales surge on the way thanks to Apple Intelligence. Still, considering its valuation, the upside on the stock is likely limited at this point.
