Warren Buffett.
Getty Images
Warren Buffett’s Berkshire Hathaway has seen its Apple stake drop in value by $32 billion this year.
The decline in worth exceeds Berkshire’s $31 billion cost base for the position.
Apple stock has tumbled 20% this year on fears of an economic downturn and flagging iPhone demand.
Warren Buffett’s Berkshire Hathaway has seen $32 billion wiped off the value of its Apple stake this year, or about $1 billion more than it spent on the iPhone maker’s shares.
The famed investor’s company owned 908 million shares of Apple, with a cost base of $31 billion, at the end of December. The technology titan’s stock price has tumbled 20% this year, reflecting a wider market slump as investors brace for an economic downturn, and concerns of tepid demand for the new iPhone 14.
As a result, Berkshire’s stake has plunged in value from $161 billion to $129 billion this year. Meanwhile, Apple’s market capitalization has shrunk from about $2.9 trillion to $2.3 trillion — equivalent to Berkshire’s entire market cap of $600 billion.
Buffett and his team plowed about $36 billion into Apple between 2016 and 2018, but cashed out about 9% of the position in 2020, reducing its cost base to $31 billion. They purchased another 3.9 million Apple shares in the second quarter of this year, suggesting they spotted fresh value in the stock.
Berkshire counts Apple as the number-one holding in its stock portfolio, and it remains Apple’s largest single shareholder with a 5.6% stake. Unsurprisingly, Buffett has heaped praise on Apple in recent years, labeling it a “family jewel” and “probably the best business” he knows.
However, Buffett’s company has endured a rocky ride with Apple stock in recent weeks. It saw $9 billion erased from its stake on September 13, as the tech giant suffered the sixth-biggest single-day loss of market value for a US company in stock-market history. Moreover, nearly $7 billion was wiped off the position by Apple’s stock slump on Thursday.
Of course, Buffett famously invests for the long term, and pays little attention to daily price movements. Given his immense fondness for Apple, it’s unlikely he’ll be cutting ties with the company’s stock anytime soon.