With a market capitalization of over $950 billion, Berkshire Hathaway ranks as the eighth largest company in the world. Led by CEO and world-renowned investor Warren Buffett, the company has generated incredible returns for its long-time shareholders and continues to have considerable influence in the investment world.
The Oracle of Omaha has never been a big fan of portfolio diversification, preferring to concentrate Berkshire’s stock holdings in a small number of high-conviction investments. But Buffett and Berkshire have made some dramatic moves recently, and the balance of the company’s portfolio has changed significantly.
Let’s take a look at two of the stocks he’s most invested in right now.
Despite big changes, it remains Buffett’s biggest gamble
Keith Noonan (Apple): Berkshire Hathaway shocked the world with its recent Filing of Form 13F. With the disclosure report it submitted to the Securities and Exchange Commission (SEC) earlier this month, the investment conglomerate revealed that it had sold more than 389 million shares of Apple (NASDAQ: AAPL) The move reduced Berkshire’s total investment in the tech giant by 49%, and immediately raised concerns that Buffett was losing confidence in the tech leader.
On the other hand, Apple remains Berkshire Hathaway’s largest stock investment by far. Even after the sale, the iPhone company’s stock still represents about 28.8% of Berkshire Hathaway’s total stock portfolio, more than three times as much as its second-largest position.
While Buffett has championed diversification in the past, it’s not hard to see why his company chose to reduce its exposure to the tech giant. At its peak in terms of concentration and valuation, Apple accounted for more than half of Berkshire’s total stock portfolio.
The investment has been a huge success for Omaha-based Oracle, and the recent stock sale has generated enviable profits. But whether Berkshire will continue to take profits on its Apple investment will likely remain a hotly debated topic until Buffett’s company releases its next 13F filing.
Buffett has previously described Apple as “probably the best company” he knows, but there are big questions about the mobile leader’s future. For starters, it remains to be seen whether Apple will be able to score big wins in artificial intelligence (AI). Investors and analysts are also wondering whether the company can score major new wins in mobile and other hardware categories that can generate strong growth.
Berkshire’s moves to reduce its stake in Apple are among the biggest by institutional investors this year. But while Buffett has reduced his company’s exposure to the mobile leader, he appears to remain bullish on the stock overall.
The Classic and Timeless Buffett Stock
Jennifer Saibil (American Express): Warren Buffett owns two stocks…
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