Buffett has reduced the weight of Apple in his investment portfolio, selling approximately half of his Apple shares.
The move has generated around $94 billion in gross revenue for Buffett.
As a result, he’s expected to pay approximately $15 billion in taxes.
The stock sale operation carried out by Warren Buffett, also known as “the Oracle of Omaha,” during this year is expected to result in a $15 billion tax bill, as Quartz reports.
Why this matters. Buffett’s significant sale of Apple shares will lead to substantial tax implications, reflecting the successful nature of his investment endeavors.
Some context:
- Berkshire Hathaway, Buffett’s holding company, sold 505 million shares of Apple stock during the first half of 2024.
- This represents a 55.8% reduction in its stake in Apple compared to last year.
- The average sale price was $186 per share.
- The estimated profit is $150 per share.
- The tax bill, factoring in state and federal taxes, is projected to be around $15 billion.
Comparison. The amount Buffett will have to pay for the sale of Apple shares alone exceeds the annual revenue of:
- Spotify: $14,337 million in 2023
- Nintendo: $11,852 million in 2023
- Airbnb: $9,917 million in 2023
The impact. Buffett’s portfolio still has Apple as its largest investment, although it’s down from about $175 billion to about $84 billion. Buffett has been reducing that stake for three consecutive quarters.
The investor has also reduced his stake in HP, suggesting less interest in hardware. However, in May he reinforced his commitment to Apple and other companies:
“Unless something really extraordinary happens, we will own Apple, and American Express, and Coca-Cola when Greg [Abel, Buffett’s successor] takes over this place.”
The outlook for Apple. Its shares are up almost 20% year-to-date, and its price is close to $222. June’s WWDC 2024 and the announcement of Apple Intelligence, one of the pillars of future growth, were well received by investors and boosted the stock.
In summary. Despite Buffett’s significant sell-off in Apple stock, the investor remains confident in the company, or so he says publicly. However, he has reduced his exposure to it and preferred to take profits on the significant gain he had accumulated.
In any case, in a few months, his next tax bill will increase by approximately $15 billion from the Apple deal alone.
This article was written by Javier Lacort and originally published in Spanish on Xataka.
Image | Xataka using Midjourney
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