Warren Buffett Once Referred to Apple As the Best Business in the World. So Why Did He Just Sell 116 Million Shares?

Core Viewpoint - Warren Buffett's recent sale of 116 million shares of Apple raises questions about his confidence in the company, despite Apple being a significant part of Berkshire Hathaway's portfolio since 2016 [1][4]. Group 1: Investment History and Strategy - Buffett has historically avoided the technology sector, focusing instead on stable cash flow companies, but he invested in Apple due to its profitability [2]. - Over the past eight years, Apple's stock price has increased by over 600%, making it Buffett's largest position, comprising more than 50% of Berkshire's portfolio at one point [2][3]. - Buffett's recent reduction of his Apple stake by approximately 13% suggests a strategic adjustment in response to potential future tax increases [4]. Group 2: Current Company Performance - Apple currently trades at a forward price-to-earnings (P/E) ratio of 28.8, significantly higher than the S&P 500's forward P/E of 20.8, indicating a premium valuation [5]. - The company has experienced declining revenue for over a year, with stalling iPhone sales and reduced demand in China being primary factors [5]. - There is concern regarding Apple's lack of communication about its ambitions in artificial intelligence, an area where competitors are heavily investing [5][6]. Group 3: Future Outlook - Despite current challenges, Buffett's long-term investment strategy suggests he is not overly concerned about short-term fluctuations in Apple's performance [6]. - For investors seeking growth opportunities, the current valuation of Apple may be considered too high relative to its performance, indicating a cautious approach is warranted [6].