Berkshire Hathaway, under new CEO Greg Abel, has made significant portfolio adjustments, notably halting the sale of its substantial Apple (AAPL) stake and tripling its investment in Alphabet (GOOGL/GOOG). This strategic shift indicates renewed confidence in big tech and a departure from the prior management’s tactics.
The filing also reveals exits from several prominent companies and a new investment in Delta Air Lines (DAL), underscoring Abel’s intent to forge his own path for the conglomerate’s equity portfolio.
In a significant move signaling a new era for Berkshire Hathaway's investment strategy, new CEO Greg Abel has steered the conglomerate to halt the multi-quarter selling trend of its massive Apple stake and substantially increase its position in Alphabet. This marks a clear departure from former CEO Warren Buffett's recent approach and suggests a renewed confidence in big tech from Abel, who was previously known for his operational expertise in utilities.
The latest 13-F filing reveals that Berkshire Hathaway maintained its substantial holding in Apple (AAPL), comprising roughly 228 million shares. While this represents a decrease from its peak, it still accounts for approximately 22% of Berkshire's equity portfolio, solidifying Apple's position as its largest investment. This decision to hold steady reverses nearly two years of trimming by the Buffett-led team.
In contrast, Berkshire more than tripled its investment in Alphabet (GOOGL/GOOG), increasing its share count to approximately 58 million by the end of March. This aggressive expansion, valued at nearly $17 billion, comes just months after initiating the position and represents a notable bet on a technology giant, a sector Buffett has historically approached with caution.
Beyond these two tech titans, the filing also shows a new $2.65 billion stake in Delta Air Lines (DAL) and a new, albeit immaterial, position in Macy's. These investments indicate a willingness to explore areas Buffett had previously avoided.
Conversely, Berkshire aggressively pared down its holdings, exiting positions in Amazon, Visa, Mastercard, Domino's Pizza, and UnitedHealth Group. The stake in Constellation Brands was reduced by a staggering 95%, and Chevron also saw a significant cut. Many of these divested or reduced holdings were previously linked to former investment manager Todd Combs, suggesting Abel is actively reshaping the equity portfolio to reflect his own strategic vision.
Apple's Strong Fundamentals Bolster Long-Term Outlook
The decision to maintain the Apple position is further supported by the company's robust financial performance. Apple recently reported its best March quarter ever, with revenue soaring 17% year-over-year to $111.2 billion and earnings per share climbing 22%. Growth was widespread across all geographic segments and product lines, including a 22% jump in iPhone revenue and a record $31 billion in services revenue, which boasts a significantly higher gross margin than products.
CEO Tim Cook expressed optimism, noting the iPhone 17 lineup's popularity and market share gains. The company also provided strong guidance for the June quarter, anticipating 14% to 17% revenue growth. Apple's commitment to shareholder returns was further evidenced by a 4% dividend increase and a $100 billion boost to its share-buyback authorization.
While potential headwinds exist, such as rising memory costs and the upcoming leadership transition with Tim Cook's planned departure on September 1st, these risks appear manageable and do not significantly alter the long-term investment thesis for Apple. Abel's strategic recalibration of Berkshire's portfolio, marked by holding Apple and significantly increasing Alphabet, signals a confident and independent approach to managing the conglomerate's substantial equity holdings.
