Berkshire Hathaway recently unveiled its first 13-F filing under the leadership of new CEO Greg Abel, revealing considerable shifts in the company’s equity holdings. One of the most notable adjustments was the decision to maintain the conglomerate’s significant stake in Apple, marking a departure from a multi-quarter selling trend that had been consistent during Warren Buffett’s tenure as CEO. This decision suggests that the previously cautious approach to Apple may not stem from a waning confidence in the tech giant but rather an effort to balance a position that had ballooned due to compounding gains.
In a clear display of confidence in technology, Berkshire not only retained its position in Apple, which remains approximately 228 million shares—22% of its equity portfolio—but also dramatically increased its stake in Alphabet from around 17.85 million shares to nearly 58 million shares. This move pushes the value of Berkshire’s investment in Alphabet to close to $17 billion and signifies a shift in strategy given Buffett’s historical hesitance to heavily invest in tech stocks.
The 13-F report also indicated new investments, including a $2.65 billion stake in Delta Air Lines and a smaller position in Macy’s, marking a willingness to explore sectors Buffett had previously shunned. In contrast, Berkshire reduced its positions significantly in companies like Amazon, Visa, and Mastercard, alongside a massive 95% cut to its investment in Constellation Brands, suggesting that Abel is taking a fresh approach to the portfolio.
While the decision to keep Apple’s stake steady may appear unremarkable, the tech company’s strong fiscal second-quarter results bolster the rationale behind it. Apple reported a 17% year-over-year revenue increase, bringing in an impressive $111.2 billion, with substantial growth across all geographic areas. Earnings per share saw a 22% increase, and the company’s services division set records, contributing significantly to the gross margin.
Apple’s CEO Tim Cook supported positive sentiment, highlighting that the iPhone 17 lineup is the most successful release in the company’s history, and market share has increased during the quarter. Moreover, Apple anticipates further revenue growth of 14% to 17% in the forthcoming quarter and has enhanced its dividend by 4%.
However, some challenges loom on the horizon, including potential rising memory costs due to prioritization of artificial intelligence chips, alongside Cook’s upcoming departure as CEO scheduled for September 1.
Despite these uncertainties, Abel’s strategic decisions during his inaugural quarter in charge—such as foregoing the reduction of Apple’s stake and significantly increasing investment in Alphabet—may enhance Berkshire Hathaway’s attractiveness as a stock, signaling a distinct shift in investment philosophy under the new leadership.
As investors weigh the merits of adding Berkshire Hathaway to their portfolios, it becomes clear that the company is poised to adapt under Abel’s guidance, potentially redefining its investment approach in the evolving technology landscape. Meanwhile, other investment opportunities have been highlighted, with some analysts recommending alternative stocks they believe may generate high returns in the coming years.
