Warren Buffett’s Berkshire Hathaway Inc (NYSE:BRK.B) pared back its stake in Apple Inc (NASDAQ:AAPL), one of the firm’s core tech investments, by nearly 400 million shares in the second quarter, according to weekend reports.
It means Berkshire’s stake in the Cupertino megacap has more than halved this year, although the firm still retains a significant stake valued at $84.2 billion as of 30 June.
Buffett has been increasing Berkshire’s cash reserves to record levels of late, with the firm’s second-quarter earnings disclosing more than $270 million in cash and short-term US Treasury bills.
Although Apple share price increased following Berkshire’s exit, fears of bloodshed in the tech sector have been mounting in recent days.
The tech-heavy Nasdaq 100 Index is expected to collapse up to 1,000 points, or 5%, when markets open on Monday, following a 2.3% tumble at the end of last week.
There are worries that artificial intelligence has failed to make good on its promises, at least in the short term, following a spate of seemingly inadequate tech earnings.
Microsoft copped an $81 billion beating after its fourth-quarter results last week. Despite hitting targets overall, Microsoft's AI-powered Azure Cloud computing platform fell slightly shy of estimates, leading to a punishing response on the stock market.
Amazon.com Inc (NASDAQ:AMZN) was battered for similar reasons on Friday.
Although Apple came out comparatively well in the latest earnings seasons, it faces a longer term issue of convincing investors that it is up to speed in the AI race.
Whether it can do that remains to be seen, though camp Buffett evidently prefers a defensive, cash-heavy position in the meantime.