Core Viewpoint - Warren Buffett considers Apple a strong company with a great brand and excellent management, but believes the stock may be overvalued at a forward P/E of about 33, suggesting a decrease in exposure to the stock [1] Group 1: Berkshire Hathaway's Investment in Apple - Apple has been Berkshire Hathaway's largest holding, with over $30 billion invested between 2016 and 2018, at one point accounting for half of its marketable equity portfolio [2] - Despite selling nearly three-quarters of its position, Apple still represents over 20% of Berkshire's $315 billion in assets [2] - Buffett has sold more stocks than he has bought for 12 consecutive quarters, leading to a cash and equivalents pile of $354 billion by the end of Q3 [3] Group 2: Investment Strategy and Market Conditions - Buffett has struggled to find attractive investment opportunities in the stock market, leading to stock sales and a preference for short-term Treasury bills [4] - Sales of Apple and Bank of America have raised $224 billion in cash since Q4 2022, with limited opportunities to deploy this capital into new investments [9] Group 3: New Investments and Market Trends - Buffett's recent investment includes Alphabet, which he views as a missed opportunity since 2018, recognizing its strong profitability in digital advertising [10] - Alphabet's revenue run rate is approaching $300 billion, with Google Search revenue growing 15% in Q3 [11] - The company has seen a 34% increase in Google Cloud revenue, with a backlog growing 46% from the previous quarter [13] Group 4: Valuation and Future Outlook - Despite strong growth, Alphabet shares were initially purchased at a forward P/E of around 20, and currently trade at about 28, still considered attractive given the company's strong balance sheet [14][15]
Before Retiring, Warren Buffett Sold Apple and Bank of America Stock and Bought This Incredible Stock That's Up 78% in 6 Months