Buffett Sets New Cash Record as He Sells Shares of Major Tech Companies

Berkshire Hathaway’s Cash Pile Reaches New Heights

Warren Buffett’s Berkshire Hathaway continues to amass a staggering pile of cash, as revealed in its first quarter 2024 earnings report.
The conglomerate’s cash equivalents have surged to $188.99 billion from $167.6 billion at the end of 2023.

Investment Speculations

Followers of the holding company, especially of the world’s most influential investor, are eagerly seeking clues on how Buffett might deploy this enormous liquidity.
Options range from acquiring new businesses to purchasing stocks or ramping up share buybacks since Berkshire does not pay dividends.

Shareholders are keen to learn how Buffett, also known as the Oracle of Omaha, and the Berkshire management plan to utilize this cash through investments.
Buffett has expressed frustration in the past about the challenges of finding suitable acquisition targets.

With interests spanning railroads, tech, construction, and energy, Berkshire is viewed as a barometer of the U.S.
economy’s health, particularly in times of high inflation and interest rates.

Financial Performance Highlights

The increase in liquidity stems from a 39% rise in operating earnings to $11.22 billion in the first quarter.
Noteworthy is the continued divestment of Apple shares, contrasting with previous investments in the tech giant.

Record Cash Reserves and Investment Insights

Berkshire Hathaway’s cash reserves have hit another high, underscoring Warren Buffett’s challenge in finding large-scale deals.
The company’s equity stood at $189 billion at the end of the first quarter, surpassing the previous year-end record.

Operating earnings in the first quarter totaled $11.2 billion, up from $8.07 billion in the same period the previous year, defying Buffett’s caution last year regarding declining profits across various operations.

In a surprising move, Berkshire revealed selling nearly $20 billion in shares in the first three months of the year while buying back $2.7 billion worth.
Consequently, the value of its stock portfolio decreased to $336 billion from $354 billion at year-end, marking a second consecutive decline in Berkshire’s Apple holdings.

Buffett’s sales of Apple shares, totaling around 126.7 million, amounting to a roughly 13% decrease in the investment’s value, have raised eyebrows given his previous endorsement of the tech giant as a key asset in Berkshire’s portfolio despite concerns over valuation.

Buffett’s recent actions regarding Apple stocks, a surprising shift from his previous support, could be linked to valuation worries.
Apple’s substantial growth in 2023, representing half of Berkshire’s peak portfolio, might have prompted the move.
Buffett last trimmed this holding at the end of 2020, a decision he later referred to as “probably a mistake.”