In a CNBC interview, Warren Buffett, Berkshire Hathaway’s (BRK-B) chairman, said that the company has been buying Amazon shares (AMZN). Amazon was trading sharply higher in pre-market trading on May 3. The S&P 500 (SPY) futures are also pointing to a strong opening.
Amazon getting a place in Berkshire Hathaway’s portfolio isn’t a small deal. While Buffett has always admired Jeff Bezos, he didn’t invest in Amazon. This time, a different investment manager at Berkshire Hathaway took a position in Amazon—not Buffett.
Buffett’s influence over equity markets seems to be waning. After the company released its fourth-quarter 13F on February 14, markets had a mixed reaction. Suncor rose 4.1%. Investors saw Berkshire Hathaway’s investment in the company as a bullish sign. However, the price movements of other stocks that Berkshire Hathaway added or sold were largely in line with their peers.
Apple closed marginally lower after Berkshire Hathaway announced that it trimmed its stake. On February 14, the entire FAANG (Facebook, Amazon, Apple, Google, and Netflix) pack closed with losses despite the NASDAQ Composite (QQQ) closing in the green. Oracle (ORCL) closed with a gain despite Berkshire Hathaway exiting the stock within a quarter of buying it. While Berkshire Hathaway’s stake in Amazon might not be a game changer, it could decrease some of the valuation concerns. Berkshire Hathaway is known for its value investments.
However, other investment managers’ views might be different from Buffett’s views. In the fourth quarter, one of the investment managers sold Apple shares (AAPL). Buffett still holds Apple. Buffett indicated he would buy more Apple shares if the stock price falls.