Warren Buffett’s head-turning sale of his big Apple stake did not faze Wall Street analysts’ conviction in the iPhone maker. Berkshire Hathaway disclosed in its earnings filing over the weekend that its Apple stake was valued at $84.2 billion at the end of the second quarter, indicating that the Oracle of Omaha dumped almost half of the tech stake. Shares of Apple dropped 4.8% on Monday and another 2% on Tuesday. Some Apple analysts speculated that the profit-taking move from the Oracle of Omaha was driven by portfolio management and valuation concerns, rather than anything fundamental with the Tim Cook-led company. “In our opinion, this could be for diversification or other reasons, and does not change our view on the fundamentals of Apple,” Bank of America’s Wamsi Mohan said in a note. Mohan reiterated a buy rating on Apple following the Berkshire news. Buffett typically does not want a single holding to grow too large and after Apple’s stellar run over the past few years, it had taken up half of Berkshire’s equity portfolio at one point. Bank of America noted that Apple shares rallied 23% in the second quarter despite Berkshire’s selling, showing the stock’s strength. Apple took off to hit a record high last quarter, as it gave more detail to investors about its artificial intelligence plans. AAPL YTD mountain Apple Bernstein’s Toni Sacconaghi believes Buffett started trimming Apple because the stock was getting too expensive for the value investor. “While he continues to publicly sing the praises of Apple as a business, Buffett has historically been fairly valuation sensitive,” Sacconaghi said in a note. He has an outperform rating on Apple. Bernstein pointed out that Berkshire built most of its Apple position at a 15 times multiple, while selectively adding at 20 times earnings or below and trimming at 30 times earnings and above. Apple traded above 30 times earnings on average in the second quarter. The 93-year-old investor largely avoided technology companies for most of his career before Apple. Berkshire began buying the stock in 2016 under the influence of Buffett’s investing lieutenants Ted Weschler and Todd Combs. Apple remained Berkshire’s biggest holding by far at the end of June. Wall Street firm Melius Research also said investors should be buyers on any weakness from Berkshire’s sale.
