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To some, Berkshire Hathaway<\/a> Inc.\u2019s gutting of its Apple<\/a> Inc. stake could be interpreted as a lack of conviction in the iPhone maker\u2019s growth story. But many on Wall Street are urging investors to look past the news and stay calm.<\/p>\n The Warren Buffett-led conglomerate revealed Saturday that it sold almost half of its position in the tech giant during the second quarter. Its stake now stands at roughly $84 billion, down from about $140 billion at the end of March. The selling took place during a torrid run in the stock market that sent Apple shares 23% higher and pushed the S&P 500 from one record to the next.\u00a0<\/p>\n Since 2016, when Warren Buffett first\u00a0disclosed<\/a>\u00a0its stake in Apple, its shares have soared almost 900% as the company cemented its grip on the industry, delivering Berkshire billions of dollars worth of unrealized profits along the way.<\/p>\n \u201cBuffett\u2019s reduction of his Apple stake is merely about risk management,\u201d said Joe Gilbert, senior portfolio manager at Integrity Asset Management. \u201cIf there were any concerns about the longer-term viability of Apple, Buffett would have exited the entire position. Similar to Berkshire\u2019s other stock position reductions, Buffett has meaningful unrealized gains.\u201d<\/p>\n Berkshire\u2019s portfolio reveal comes just days after Apple released its own quarterly results, which showed a return to revenue growth and signaled that new AI features will boost iPhone sales in the coming quarters. Apple shares were steady after the earnings report and ultimately ended the week higher despite the broader selloff.<\/p>\n While the investment strategy of Buffett \u2014 long known as the Oracle<\/a> of Omaha \u2014 is hard to ignore, Berkshire\u2019s stake in Apple had gotten so large in recent years that some investors had begun to wonder whether the firm would have to trim its position to balance out its holdings. Even after the unwind, Apple\u00a0remains<\/a>\u00a0Berkshire\u2019s largest single position.\u00a0<\/p>\n \u201cIf you\u2019ve got this outsized position you take some profits and you reduce some of your concentration risk,\u201d said Cathy Seifert, a research analyst at CFRA. \u201cThey still have a fairly concentrated portfolio,\u201d she added.<\/p>\n It\u2019s also not the first time Berkshire has cut its stake in Apple. At its annual meeting in May, the firm revealed that it had reduced its position during the first quarter of the year. At the time, Buffett\u00a0hinted<\/a>\u00a0to investors that tax implications may have played a role in the sale.<\/p>\n Representatives for Apple and Berkshire Hathaway didn\u2019t respond to requests for comment outside of regular business hours on Sunday.<\/p>\n The latest announcement comes amid broader concern about the potential of an economic downturn ahead. Worse-than-expected jobs data on Friday stoked fears the Federal Reserve may have waited too long to start reducing interest rates, sending the Nasdaq<\/a> 100 Index into a technical correction and the Cboe Volatility Index toward 25.<\/p>\n Megacap peers including Microsoft<\/a> Corp., Amazon<\/a>.com Inc. and Alphabet<\/a> Inc. have all tumbled from record highs reached in early July. In total, Nasdaq 100 members have shed more than $3 trillion in value over that stretch with both Nvidia<\/a> Corp. and Tesla<\/a> Inc. each seeing declines of more than 20%. Apple, meanwhile, is down about 6% from its all-time high.<\/p>\n It\u2019s possible that Berkshire, like an increasing number of investors, wants to see more proof that Apple\u2019s AI investments will pay off with revenue growth and isn\u2019t convinced that\u2019s happening fast enough, according to Brian Mulberry, client portfolio manager at Zacks Investment Management.<\/p>\n Apple\u2019s valuation multiple \u2014 at 33 times future profits as of mid-July \u2014 was 11 points higher than that of the broader S&P 500, a gap that was last seen in the aftermath of the pandemic and the financial crisis, data compiled by Bloomberg show. But despite the valuation premium, Mulberry thinks it still makes sense for investors to own Apple shares. \u201cThey\u2019re still in a healthy balance sheet position and they\u2019re still going to grow earnings faster than the broader market,\u201d he said.<\/p>\n Others, including Wedbush analyst Dan Ives, point to Apple\u2019s brand loyalty and future growth \u2013 it\u2019s on the cusp of what he thinks is a major upgrade cycle that will drive revenue growth in 2025 and 2026.\u00a0<\/p>\n \u201cWhile some could read this as confidence worry, Apple just delivered a robust quarter with a massive AI driven super cycle ahead and we do not view this as the time to hit the exit button,\u201d Ives said.<\/p>\n Of course, Apple isn\u2019t the only stake that Berkshire has trimmed lately \u2014 it\u2019s been\u00a0unloading shares<\/a>of Bank of America<\/a> Corp., cutting its position by 8.8% since mid-July. Some see that as a sign that Buffett doesn\u2019t see any individual problems with either company, but is instead betting that the US consumer and broader economy are set to weaken.<\/p>\n \u201cBuffett may feel we\u2019re about to go into a recession, so by raising cash now he will be able to buy companies cheap later on,\u201d said Jim Awad, senior managing director at Clearstead Advisors. \u201cHe may smell an opportunity coming.\u201d<\/p>\n<\/div>\n\nRecommended Newsletter: <\/strong>CEO Daily provides key context for the news leaders need to know from across the world of business. Every weekday morning, more than 125,000 readers trust CEO Daily for insights about\u2013and from inside\u2013the C-suite. Subscribe Now<\/a>.<\/div>\n