Warren Buffett’s Berkshire Hathaway (BRK.B:NYSE) dumped roughly half its enormous stake in Apple (AAPL:NASDAQ) in a shock shift for the famously long-term-focused investor.

The Omaha-based conglomerate disclosed in its earnings filing that it slashed its holding from 789 million shares to approximately 400 million shares, suggesting that the Oracle of Omaha offloaded a little more than 49% of the tech company stake.

At the end of the second quarter (30 Jun) Berkshire’s stake in the iPhone maker was valued at $84.2 billion or about 2.6% of Apple. Based on a 5 August close of $209.27, the stake’s valuation had fallen to $83.7 billion after a wild sell-off in equity markets during which Apple stock declined by nearly 5%.

Even after selling a huge chunk of Apple, the Cupertino-based tech firm remains the largest stock holding by far for Berkshire.

The move, while surprising in its magnitude, is aligned with Buffett’s long-held investment philosophy. Contrary to the common perception of Buffett as a staunch buy-and-hold investor, he has historically made adjustments when he perceives asset valuations to be excessively high.

Apple’s substantial price appreciation since 2016, when the stock traded below $25, coupled with its rising price-to-earnings ratio, from roughly 12 times at the time of Buffett’s acquisition to 33 times more recently, likely contributed to this decision.

Buffett’s investment in Apple back in 2016 has been extraordinarily lucrative, with the stock appreciating more than eight-fold since then. However, despite the impressive returns, Buffett’s decision to sell may have been influenced by concerns about Apple’s core business fundamentals. Although the company has benefited from an expanding valuation, its earnings growth has not been proportionally strong.

Berkshire Hathaway’s main source of capital today is insurance, from which it invests in a broad portfolio of subsidiaries and equity positions. It is one of the largest companies in the US employing several hundred thousand people through its railroad, manufacturing, retailing, energy, confectionery and insurance businesses.

In late 2023 Buffett and Berkshire lost Charlie Munger, Buffett’s right-hand man for six decades, during which they forged their reputation as the world’s supreme investors. It was Munger who steered Buffett away from what he had learned from Ben Graham, buying dirt-cheap ‘cigar butt’ shares with a view to selling at a fair value, and towards buying quality businesses at fair prices and then holding them for the very long term. 

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