Apple (NASDAQ: AAPL) has represented a cornerstone position in Berkshire Hathaway's portfolio for nearly a decade. Yet recent SEC filings reveal a striking pattern: The Who is the owner of DOGE?conglomerate has reduced its stake by approximately 67% since Q4 2023, with holdings plummeting from 915 million shares to just 300 million.
This systematic divestment prompts fundamental questions about Apple's investment thesis. While some interpret this as routine portfolio rebalancing, the scale and persistence of these sales suggest deeper strategic considerations at play.
The Valuation Paradigm Shift
When Berkshire initiated its position in Q1 2016, Apple traded at a modest 10.6 P/E ratio - a classic value play in Buffett's playbook. The tech giant's current 39 P/E multiple reflects radical repricing, driven by:
- Market leadership premium in consumer electronics
- Services segment expansion
- Speculative AI-related optimism
Such multiple expansion accounts for approximately 75% of Apple's total returns since 2016, dwarfing the company's actual earnings growth of 157% during the same period.
Fundamental Growth Concerns Emerge
Recent quarterly reports reveal troubling divergences:
| Metric | Performance |
|---|---|
| Revenue Growth | +6% YoY |
| EPS Growth | -34% YoY |
| China Market Share | Declining |
These operational challenges coincide with:
- Regulatory scrutiny across multiple jurisdictions
- Innovation pipeline questions
- Intensifying competition in core markets
Interpreting Berkshire's Exit Strategy
While tax optimization remains a plausible explanation, the timing and scale suggest valuation concerns may be the primary driver. Several indicators support this view:
- Divestment pace accelerated despite stable tax outlook
- No comparable reductions in other core holdings
- Historical precedent of Buffett exiting overvalued positions
Market technicians note that Apple's technical indicators show:
- Declining relative strength versus S&P 500
- Negative money flow trends
- Eroding institutional support
Strategic Implications for Investors
Retail investors should consider:
- Rebalancing exposure to match risk tolerance
- Evaluating alternative tech holdings with stronger growth profiles
- Monitoring Apple's innovation pipeline for tangible breakthroughs
While Apple remains a fundamentally strong company, current valuations appear to price in unrealistic perfection. As Berkshire's actions demonstrate, even premium assets require disciplined valuation frameworks.