Apple Stock Could Have Stumbled After Buffett's Sales. Here's Why It Hasn't

Dow Jones11-04

Apple's stock inched down in the Monday premarket after Warren Buffett's Berkshire Hathaway ditched more shares.

The Sage of Omaha has been dumping Apple stock in 2024 -- but the iPhone maker's investors don't seem too fussed.

The stock was down 0.8% to $221.12 in Monday's premarket -- a small drop, but hardly evidence that investors are seeing Buffett's latest move as a sign to trim their own positions.

Buffett's Berkshire Hathaway unloaded another 100 million shares over the third quarter, a 10-Q filing published on Saturday showed. Its overall stake in the Big Tech company is now down by about two thirds -- from 905 million shares -- since the start of the year.

From glancing at Apple's share price, you wouldn't know the accomplished investor has been selling.

While Apple had a rough start to the year as analysts warned about slowing sales and a weak macroeconomic environment in China, its shares are up about 35% since April. The benchmark S&P 500 is up 15% over the same period.

The rally means Apple has been able to cling onto its crown as the world's largest company in terms of overall market capitalization, despite a challenge from artificial intelligence darling Nvidia.

Wall Street thinks the rally could last a little longer. Despite a so-so earnings report last week, two thirds of the 51 analysts who cover the stock rate it as a Buy, according to FactSet data, with a consensus price target of just over $244 implying there's still about 10% upside.

The key factor soothing shareholders has been the iPhone. Rebounding sales of Apple's flagship device helped it to beat analysts' third-quarter earnings and sales targets, although it did warn of a slowdown in the current quarter amid tough competition in China with local smartphone maker Huawei.

AI could boost Apple's stock, too. The company released its Apple Intelligence tool for the iPhone 16 last week -- and while it's a little less glitzy than some shoppers had hoped, bulls are largely sticking to their belief that the new features could be a tailwind for shares over the longer term.

"Our view is Apple's AI rollout over the next few months kick-starts a new era for Cupertino as ultimately hundreds of AI driven apps get built by developers on top of the building blocks of Apple Intelligence," Wedbush analyst Dan Ives, who rates the stock as an Outperform with a $300 price target, said in a research note last month.

That's clearly not been enough to convince Buffett that Apple is worth holding -- but the stock's strong performance since April is a reminder that investors don't always have to blindly follow the example set by one of the world's greatestest investors.

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Comments

  • AcidIce
    11-04
    AcidIce
    Apple is a RIP Off device that's not worth it's price on the iphone & EVEN lesser on it's shares. Only Warren knows about it & it could be crashing even further in the months or even years to come. If it's so good why would Warren sell their shares? He KNOWS something most don't know. BUT from the outside Apple SUCKS!!
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