Why Is Berkshire Trimming Apple?
On February 17th, Berkshire Hathaway’s latest 13F filing landed. Another 4% trim of Apple in Q4 2025. The stake is now around $62 billion — down from a peak position of over 915 million shares in Q3 2023, valued at roughly $174 billion by year-end 2023.
The financial press reacted the way it always does: “What does Buffett know?” and “Is Apple in trouble?”
Neither. But to understand what’s actually happening, you first have to clear away the explanations that sound right but aren’t.
What This Isn’t About
Every time Berkshire makes a move, the financial press runs it through the same filter: P/E ratios, market valuations, sector rotation, Fed policy. Apple is trading in the low 30s on forward earnings — expensive relative to its recent growth. The broader market looks stretched. Corporate tax rates might rise. Buffett mentioned taxes at the 2024 annual meeting.
All of those things are true. None of them explain what’s happening.
This is the same misunderstanding that has followed Buffett for fifty years. The pundits and the public have never really grasped what he’s doing, even though he’s tried to explain it many times. It’s not a secret. They keep overlaying their idea of “value investing” — screens, ratios, buy-low-sell-high timing — onto a man who operates on a completely different premise. Every Berkshire move gets translated into the language of conventional analysis because that’s the only language most commentators speak.
And the reason they speak that language is that they’re playing a fundamentally different game. Ninety-nine percent of investors buy stocks based on what they think someone else in the market will be willing to pay for them in the future. That’s it. The entire exercise — the price targets, the twelve-month forecasts, the “where will this stock be next year” segments on cable news — is an attempt to guess what the next buyer will pay.
In Buffett’s world, that is insane.
Buffett buys businesses he’d be comfortable owning if the stock market closed for ten years. Not “comfortable” in the abstract, motivational-poster sense. Comfortable in the sense that the business would keep mailing him checks — in the form of true free cash flow — regardless of whether anyone was willing to buy the stock from him. The value is in what the business produces, not in what the next person in line will pay for it.
Turn on any cable financial show and count how many seconds pass before someone offers a price target. You will not hear a sober evaluation of discounted future cash flows. You will hear people guessing what other people will do. That’s the game almost everyone is playing. It’s not the game Buffett plays. And because the commentators can’t imagine his game, they translate his moves into theirs.
As I’ve written before in “The Most Misunderstood Phrases in Buffett-Speak: Free Cash and the Float“ and “The Buffett Indicator: What It Is — and What It Is Not,” Buffett doesn’t use market valuation to decide when to buy or sell. He evaluates individual businesses — their cash generation, their moat, and whether the price offers a margin of safety. The man who sat on a record cash pile not because the market was “overvalued” but because he couldn’t find anything that met his criteria is not suddenly timing the market through Apple sales.
He held Coca-Cola through the late-1990s bubble when it traded at 50 times earnings and never sold a share. He sat through Apple at 30x, 35x, and higher without flinching. “The market is overvalued” is not a phrase that has ever driven a Buffett sell decision, and it isn’t driving this one. But if all you have is a P/E hammer, everything looks like a valuation nail.
The tax argument is real but insufficient. Taxes may have influenced the timing, but they don’t explain the scale. You don’t sell 74% of your best investment over two years just to optimize a tax bill.
And “the market is overvalued” is the laziest explanation of all. Buffett has publicly and repeatedly dismissed market timing as a strategy. He was buying aggressively during periods when plenty of smart people thought the market was overvalued. He held through 2000, 2008, and 2020 without panic-selling his core positions.
There’s one more explanation worth taking seriously, because unlike the others, Buffett actually does this sometimes: he changes his mind. He sold every newspaper Berkshire owned in 2020 after decades of defending the industry. He dumped the entire airline portfolio overnight in the spring of 2020 when he decided the pandemic had permanently altered the business model. He got out of Wells Fargo after the fake-accounts scandal revealed a cultural rot he couldn’t stomach. He exited TSMC after barely a year when he decided the geopolitical risk of a Taiwan-based chipmaker was existential, and he unwound Berkshire’s entire position in BYD as China risk became impossible to price. When Buffett decides the fundamental thesis is broken — whether it’s a business model, a culture, or a country — he doesn’t trim. He exits.
And that’s precisely why the “changed his mind” theory doesn’t fit here. Berkshire still owns $62 billion of Apple. It’s still the single largest equity position in the portfolio. Buffett called it “a better business than any we own” and he hasn’t walked that back. When he sours on a business — airlines, newspapers, Wells Fargo — he goes to zero. He doesn’t methodically reduce from 50% of the portfolio to 23% over two years and then stop. That’s not a man who lost faith. That’s a man solving a math problem.
So if it’s not valuation, not taxes, and not market timing — what is it?
The answer is structural. Berkshire is trimming Apple because Apple’s success created a problem that Coca-Cola, American Express, and every other “forever hold” in Berkshire’s history never did. Apple grew so fast, and so far beyond the rest of the portfolio, that it was turning a concentrated portfolio into a single-stock fund.
The Problem Coke Never Created
Buffett has always run a concentrated portfolio. This is not a man who believes in S&P 500-style diversification. At any given time, the top five holdings typically account for 70% or more of Berkshire’s equity portfolio. He’s said explicitly that “diversification makes very little sense for anyone who knows what they’re doing.”
But concentrated doesn’t mean reckless. Berkshire’s traditional “Big Four”—Coca-Cola, American Express, Wells Fargo, and Geico—grew at a pace that allowed the rest of the portfolio to keep up. Buffett bought Coke in the late 1980s for about $1.3 billion. It compounded beautifully, but meanwhile Berkshire was building out its insurance empire, acquiring BNSF, expanding Berkshire Hathaway Energy. The pieces grew roughly in proportion. No single name ever threatened to swallow the whole.
Apple was a different animal.
The Whale Problem
When Buffett started buying Apple in 2016, Berkshire was already massive. To “move the needle” on a company that size, the initial position had to be enormous. So they built one—eventually accumulating over 915 million shares.
Then Apple didn’t just grow. It staged a vertical ascent. The stock roughly tripled from Berkshire’s average entry price. And here’s the part most coverage misses: Apple’s own relentless share buyback program kept increasing Berkshire’s percentage ownership even when Buffett wasn’t buying a single new share. Between fiscal 2018 and the present, Apple retired roughly 20% of its outstanding shares. Berkshire’s ownership percentage climbed automatically, silently, quarter after quarter. Left unchecked, Berkshire’s ownership percentage would keep drifting higher, increasing regulatory and governance complexity with each step.
By late 2023, Berkshire owned nearly 6% of the world’s most valuable company. Apple had ballooned to over 50% of Berkshire’s entire equity portfolio.
The Scoreboard Today
Here’s where the portfolio stands as of December 31, 2025:
Apple (AAPL): 22.6% (~$62B)
American Express (AXP): 20.5% (~$56B)
Bank of America (BAC): 10.4% (~$28B)
Coca-Cola (KO): 10.2% (~$28B)
Chevron (CVX): 7.2% (~$20B)
Berkshire has spent two years — and sold roughly 74% of its peak Apple position — engineering the portfolio back toward the kind of balance that lets them sleep at night. Not S&P 500 diversification. Berkshire diversification. Five or six names carrying the weight, none of them big enough to become an existential risk.
The Short Version
Berkshire isn’t selling Apple because Apple is overvalued, because the market is overvalued, or because Buffett changed his mind about the business. Berkshire is selling Apple because a buy-and-hold position grew so large, so fast, that it broke the portfolio math. The fix is mechanical, not philosophical. Apple is still a core holding. It’s just no longer half the portfolio.
Disclosure: The Cranky Old Guy has a large percentage of his portfolio in Apple for the same reason Berkshire had this problem — it didn’t start out that way. It was a simple buy-and-hold that grew. Based on a personal belief in Apple, I’m not afraid to let it roll indefinitely until something structurally changes. I knew better and should have invested more.