uploads/2018/12/iphone-410311_1280-4.jpg

Could Apple Cost Warren Buffett a Fortune This Time?

By

Updated

Apple

Apple (AAPL) is continuing to lose investors’ confidence in the fourth quarter. Apple stock has already fallen 24.3% sequentially as of December 13. Apple investors (XLK) are concerned about weak new iPhone sales and tariffs in the fourth quarter. On December 14 at 10:10 AM EST, Apple stock fell 2.2% from the previous session’s closing price.

Article continues below advertisement

Could Apple cost Warren Buffett a fortune?

Warren Buffett’s love for Apple started in the first quarter of 2016. Berkshire Hathaway surprised everyone by purchasing 9.8 million Apple shares. Since then, Buffett hasn’t looked back. Berkshire Hathaway added more Apple shares to its portfolio in the last few years.

In the third quarter, Berkshire Hathaway bought ~522,902 more Apple shares. Berkshire Hathaway owned ~252.5 million Apple shares at the end of the third quarter. Berkshire Hathaway’s stake value in Apple rose to $56.99 billion at the end of the third quarter—up 22.2% from $46.64 million in the second quarter. Apple is Berkshire Hathaway’s biggest equity holding in the United States.

Buffett has made profits on his Apple investments for many quarters. However, consistently increasing his bets on Apple might not yield good results this time. Apple’s tanking stock price in the fourth quarter could cost Buffett’s fund a fortune.

Rising uncertainties about US-China trade (FXI) negotiations are keeping US equities (QQQ) (VTI) on a negative note in December, which reduces Apple’s chances of a near-term recovery.

Other tech companies (XLK) (SMH) including Qualcomm (QCOM), NVIDIA (NVDA), Microsoft (MSFT), and Alphabet (GOOG) have lost 19.4%, 47.0%, 4.3%, and 11.1% sequentially, respectively.

For Market Realist CEO JP Gravitt’s views on recent market movements, sign up for a ten-day free trial of Market Realist Pro today.

Advertisement

More From Market Realist