Warren Buffett sold 100 million shares of Apple stock in the third quarter of 2024, cutting Berkshire Hathaway’s stake in the company by 25%. Despite this move, Apple remains Berkshire’s largest holding as of September 30. Apple has built a strong reputation through its engineering expertise and seamless user experience.
The company has expanded its focus beyond hardware, with services like the App Store, iCloud storage, and Apple Pay allowing it to efficiently monetize its installed base of over 2.2 billion active devices. In the fourth quarter of fiscal 2024, Apple reported modest financial results, with revenue increasing by 6% and adjusted earnings growing by 12% to $1.64 per diluted share. However, the stock price appears overvalued, with a high price-to-earnings ratio compared to Wall Street’s expectation of a 10% annual earnings increase over the next three years.
Meanwhile, Berkshire started a small position in Domino’s Pizza in the third quarter.
Buffett cuts Apple stake again
Domino’s is the largest pizza company in the world, delivering 1 in every 3 pizzas in the U.S. The company has seen consistent growth, with same-store sales increasing for seven consecutive quarters despite challenging macroeconomic conditions.
In the third quarter, Domino’s reported mixed results, with revenue increasing by 5% to $1 billion but falling short of expectations. However, net income remained flat at $4.19 per diluted share, beating expectations of a 13% decline. CEO Russell Weiner remains optimistic about the company’s future growth prospects.
Despite Buffett’s decision to reduce Berkshire’s holdings in Apple, investors should not panic and rush to sell stocks. Instead, they should stay informed and consider diversifying their portfolios to mitigate potential risks. It is essential to recognize that investment decisions are influenced by various factors, including overarching investment strategies and capital allocation needs, which may not align with individual investment goals.
By considering Apple’s strong fundamentals and ongoing innovation, investors can make informed decisions tailored to their own financial situation and investment strategy, rather than solely mirroring the actions of even the most renowned investors.
