Warren Buffett Keeps Selling His Apple Stock: Should You?

Core Viewpoint - Warren Buffett is reducing his investment in Apple, which has been Berkshire Hathaway's largest holding for a decade, due to concerns over Apple's valuation and slower revenue growth compared to competitors [1][2]. Financial Performance - Apple's revenue grew just under 7% year-over-year to $416 billion, with iPhone revenue at $210 billion and software services revenue at $109 billion [4]. - Over the last three years, Apple's revenue growth was only 7.4%, significantly lagging behind Alphabet's 37% and Microsoft's 44% growth [5]. Product Innovation - Despite some successful products like the Apple Watch and AirPods, these segments contributed only $37 billion to Apple's overall revenue, under 10% [6]. - Apple has not introduced new hardware to the mass market and has failed to invest in AI, which could jeopardize its iPhone and software services revenue streams [7][8]. Competitive Landscape - Start-ups like OpenAI are developing AI-native hardware, while competitors like Alphabet are integrating advanced AI into their products, posing a risk to Apple's market position [8]. - Apple is reportedly paying Alphabet $1 billion annually for AI services, raising concerns about the lack of innovation in its software offerings [9]. Valuation Concerns - Apple's current price-to-earnings (P/E) ratio is 37, higher than Alphabet's 27, despite Alphabet and Microsoft showing faster earnings growth [11]. - Berkshire Hathaway's decision to sell Apple shares while purchasing Alphabet indicates a shift towards companies with better growth prospects and lower valuations [12].