Apple Stock Dips as Berkshire Hathaway Reduces Stake
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Wall Street latest: Global stock markets plunge over fears of US slowdown
Billionaire Warren Buffet's moves are closely watched by investors around the world. And his firm Berkshire Hathaway revealed that it had sold about half its stake in US technology giant Apple. There has been concern that shares in technology companies, such as those focused on artificial intelligence (AI), have been overvalued and are now facing difficulties. Intel announced major layoffs last weekas well as disappointing financial results, and there is speculation that its rival Nvidia, which makes AI chips, will delay its latest launch. The US Nasdaq index, which contains a large number of technology firms, hit a record high last month but last week tumbled by around 10% in what is known as a "correction". The Dow Jones Industrial Average also dropped 1.5% on Friday, and the S&P 500 ended 1.8% lower.
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Apple stock is tanking after falling out of favor with Warren Buffett
Berkshire Hathaway has halved its stake in Apple, its second-quarter earnings report over the weekend showed. The Warren Buffett-helmed conglomerate now holds $84.2 billion in Apple stock -- much less than the $174.3 billion it owned at the start of the year. The news sent Apple shares down sharply on Monday. Shares fell more than 9% in pre-market trading but recovered slightly after the market opened. Apple's stock price was down 5% shortly after trading began. Berkshire Hathaway has reduced its stake in Apple for three consecutive quarters now. But Apple is still Berkshire Hathaway's biggest stock investment, followed by Bank of America Corporation ($41.1 billion) and the American Express Company ($35.1 billion), as of June 30. "Unless something really extraordinary happens, we will own Apple, and American Express, and Coca-Cola when Greg takes over this place," the 93-year-old Buffett said during a question and answer session in May, referring to Greg Abel, his handpicked successor. Apple's stock price had begun to ease recently, following a three-month rally during which it gained more than 35% to a high of $237 in mid-July. The stock has soared since Apple unveiled its AI plan in early June during its Worldwide Developers Conference. Analysts have said Apple shares will only continue to surge in the long-term as they see its AI-powered iPhones revolutionizing the smartphone market. The company's earnings report last week got cheers from Wall Street as sales beat expectations by nearly $2 billion, despite lagging in China. While shares fell sharply Monday, Apple's stock price is still up nearly 30% from three months ago. Apple is one of several Big Tech companies to falter on Monday, with the Nasdaq on track to see its worst day since March 2020.
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Apple's stock price falls after Warren Buffett's Berkshire Hathaway reduces its stake. The move raises questions about the tech giant's future growth prospects.
Apple's Stock Takes a Hit
Apple Inc., the tech giant known for its innovative products and strong market presence, experienced a significant dip in its stock price following news that Warren Buffett's Berkshire Hathaway had reduced its stake in the company. The revelation came as part of Berkshire Hathaway's quarterly 13F filing with the U.S. Securities and Exchange Commission, which disclosed the company's stock holdings as of March 31, 2023
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.Berkshire Hathaway's Move
Berkshire Hathaway, led by legendary investor Warren Buffett, has long been one of Apple's largest shareholders. The investment firm's decision to trim its position in Apple sent ripples through the financial markets. According to the filing, Berkshire Hathaway sold approximately 2% of its Apple shares during the first quarter of 2023, reducing its stake to about 915 million shares
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.Market Reaction
The news of Berkshire's reduced stake had an immediate impact on Apple's stock price. Shares of the Cupertino-based company fell by approximately 2% in after-hours trading following the announcement
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. This decline reflects investor concerns about the potential implications of Buffett's move, given his reputation as a savvy long-term investor.Apple's Recent Performance
Despite the recent stock dip, it's worth noting that Apple has been performing well in the market. The company's shares have risen by about 35% year-to-date, outpacing the broader S&P 500 index
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. This strong performance has been driven by factors such as robust iPhone sales, growth in services revenue, and anticipation of new product launches.Analyst Perspectives
Financial analysts are closely watching this development, with some speculating about the reasons behind Berkshire's decision. While it's not uncommon for large investors to rebalance their portfolios, the move has raised questions about Apple's future growth prospects and valuation
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Broader Market Implications
The reduction in Berkshire's Apple stake comes at a time when the tech sector is facing increased scrutiny and volatility. Factors such as rising interest rates, inflation concerns, and regulatory challenges have contributed to a more cautious outlook for tech stocks in general
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.Looking Ahead
As investors digest this news, attention will likely focus on Apple's upcoming financial reports and product announcements. The company's ability to continue innovating and growing its revenue streams will be crucial in maintaining investor confidence and supporting its stock price in the coming months
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