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Warren Buffett Is Selling Apple Stock Again. Should You Follow His Lead?
The Motley Foolยท2025-08-23 09:30

Core Viewpoint - Warren Buffett has begun selling Apple stock after nearly a year of holding, raising questions about potential insights or market conditions influencing this decision [1][2]. Group 1: Investment Strategy - Buffett's selling of Apple stock is notable as he had not sold any shares from third-quarter 2024 until now, suggesting a significant shift in strategy [2]. - Apple stock, once considered undervalued when Buffett first invested in 2016, is now trading at a premium without corresponding growth, which may be a reason for the sell-off [4][9]. - The trailing price-to-earnings (P/E) ratio of Apple has reached near its highest level over the past decade, indicating a shift in valuation [5]. Group 2: Portfolio Management - Buffett's actions may be aimed at preparing the investment portfolio for his successor, Greg Abel, who will take over as CEO at the end of the year [10][11]. - By selling Apple shares, Buffett could be freeing up cash for Abel, allowing him to manage the portfolio without needing to reverse previous decisions [11]. - Berkshire's cash and short-term investments total $344 billion, providing Abel with substantial resources for future investments [12]. Group 3: Current Holdings - Apple remains a significant part of Berkshire's portfolio, accounting for approximately 22% of its total value, while American Express is close behind at 19% [13]. - Given Apple's high valuation relative to its growth, further sales of Apple stock may be anticipated in the upcoming quarter [14].