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Berkshire's Cash Soars to $189B, Sells $20B Stocks

Berkshire Hathaway's cash reserves soar to $189 billion as it sells $20 billion in stocks, including Apple shares, amid investment strategy shift.

By Max Weldon

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5/4, 08:30 EDT
Apple Inc.
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Key Takeaway

  • Berkshire Hathaway's cash reserves soar to a record $189 billion in Q1 2024, as it sells $20 billion in stocks but buys only $2.7 billion.
  • The firm reduces its Apple stake by 10 million shares, hinting at strategic portfolio adjustments amidst buying an undisclosed bank stock and Liberty Media’s SiriusXM shares.
  • Investments like Paramount face scrutiny amid the streaming industry's challenges, while Apple's upcoming results and China performance are pivotal for Berkshire.

Berkshire's Record Cash Reserves

Berkshire Hathaway, led by Warren Buffett, has seen its cash reserves reach a new peak of $189 billion in the first quarter of 2024. This increase comes as the conglomerate continues to sell off stocks, with sales amounting to nearly $20 billion in the first three months of the year, while only purchasing $2.7 billion worth of stocks. The sales have led to a decrease in the value of its stock portfolio, which dropped to $336 billion from $354 billion at the year's end. This activity highlights the challenges Buffett and his team face in identifying valuable investment opportunities in the current market.

Strategic Portfolio Adjustments

In a notable move, Berkshire Hathaway reduced its stake in Apple by selling 10 million shares, bringing its holding down to 905.6 million shares. This decision has sparked speculation regarding the reasons behind the sale, whether it be due to an over-concentration in Apple within Berkshire's portfolio or a strategic decision by Buffett's investment deputies, Todd Combs and Ted Weschler, to free up funds for other investments. Additionally, Berkshire has made headlines with its acquisition of an undisclosed bank stock over two quarters, increasing its holdings in the "banks, insurance, and finance" sector by $2.4 billion. This move, coupled with the aggressive purchase of over 70 million shares of Liberty Media’s SiriusXM tracking stock, indicates a strategic shift in Berkshire's investment strategy.

Investments Under Scrutiny

Berkshire Hathaway's investment in Paramount and its uncertain future amidst executive changes and merger talks with Skydance may raise questions among investors. Buffett's cautious stance on the streaming industry's sustainability without price adjustments, expressed during Berkshire's 2023 annual meeting, underscores the challenges faced by the conglomerate in navigating the crowded streaming sector. Meanwhile, Apple Inc. is bracing for its second-quarter results, with analysts expecting a significant buyback announcement to counteract negative growth and competitive pressures. The tech giant's performance, particularly in the Greater China region, remains a critical factor for Berkshire's investment strategy.