Buffett Dumps More Apple

By Douglas A. McIntyre Published Feb 18, 7:48AM EST

Quick Read

Buffett Has Been Selling Apple For Several Quarters
Apple Has Not Moved Into AI
Buffett May See Limits To iPhone Sales

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In his last quarter as CEO of Berkshire Hathaway (NYSE: BRK-B | BRK-B Price Prediction), Warren Buffett remixed his portfolio, as he always does. He cut his position in Amazon (NASDAQ: AMZN) and increased his bet on Chevron. He also did something he has done for several quarters. He cut his position in Apple (NASDAQ: AAPL) sharply,

According to Bloomberg, “Also in the fourth quarter, Berkshire continued trimming its stakes in Bank of America Corp. and Apple Inc., bringing them to 7.1% and 1.5%, respectively.” He first bought Apple in 2016.

Like many of the world’s largest investors, Buffett does not always provide a rationale for buying or selling a stock.

One could make an educated guess about his move. Apple shares have increased by 8% over the past year. The S&P is 12% higher. By contrast, shares of Alphabet are up 62% over the same period

It is clear that the iPhone continues to carry Apple on its broad shoulders. In the most recent quarter, iPhone sales were 60% of Apple’s $144 billion in revenue. And, iPhone revenue was also up 23% year over year. The worry that it did not launch its new operating system late last year or early this year barely seemed to matter.

However, anyone who follows Apple can see it has been left out of the race to lead the AI industry. Massive investments are being made by Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOG), OpenAI, and numerous large public and private companies. Many of Apple’s lead AI engineers were recruited by competitors.

Apple’s move into AI is to license Google Gemini and integrate it into Siri. Reuters made the point that, “The latest agreement builds on a years-long partnership that makes Google the default search engine on Apple devices – a lucrative arrangement that drives traffic for Google while generating tens of billions in annual revenue for Apple.”

The Apple decision is the clearest indication yet that it has given up on being a leader in AI. It also means Apple will not spend hundreds of billions of dollars to be in the sector.

Did Buffett see that Apple dropped out of the AI race, and worry about it? There is a chance no one will ever know.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.