Berkshire Hathaway possesses an immense financial reservoir.
In a strategic move, Berkshire Hathaway, the conglomerate led by legendary investor Warren Buffett, has returned to its roots by appointing Stephen Hemsley as CEO of UnitedHealth Group in May, with the aim of turning the tide for the healthcare company [1].
Meanwhile, Berkshire Hathaway has been reallocating capital, selling stocks worth $6.92 billion while buying stocks worth $3.9 billion in the second quarter [2]. One of the significant changes in Berkshire's portfolio is the reduction of its Apple stake, which now represents 22.31% of its $257.5 billion portfolio [1].
The selling of 20 million Apple shares in Q2 2025 is a result of concerns over Apple's high valuation, reflected in its 32x price-to-earnings (P/E) ratio, and the potential for increased corporate taxes [1][2]. However, it's important to note that this move is part of a broader portfolio rebalancing strategy rather than a complete abandonment of the tech giant [1][2][3].
Apple remains Berkshire's largest holding and a key driver of its portfolio, but the trimming of its stake signals a more cautious stance [3]. This strategy aligns with Buffett's focus on maintaining liquidity and applying value investing principles in a high-debt, low-growth economic environment [1][4].
In a bid to build a margin of safety, Berkshire Hathaway has also been accumulating cash reserves and investing in undervalued sectors such as UnitedHealth, Chevron, and Nucor [1][4]. This shift is evident in the addition of UnitedHealth Group to Berkshire's portfolio, a move that has seen the stock of UnitedHealth Group rise more than 8% after the announcement [2].
Berkshire Hathaway's cash balance at the end of June stood at $344 billion, including equivalents [2]. Despite the sales, Berkshire Hathaway slightly increased its stakes in Chevron, Domino's Pizza, Pool, beer maker Constellation Brands, and Pool in the second quarter [2].
On the other hand, Berkshire Hathaway wrote off $3.8 billion of its stake in Kraft Heinz after taxes in the second quarter [2]. The conglomerate also reduced its position in Bank of America and sold all remaining T-Mobile shares in the same quarter [2].
Berkshire Hathaway's Class B shares have risen by 5.7% this year, while the S&P 500 has risen by 10% [2]. Darren Pollock, portfolio manager at Cheviot Value Management, which owns Berkshire shares, expressed optimism, stating, "Yes, the headlines are frightening, but better times could be ahead" [1].
As of the latest trading, Apple shares were last traded at 30 times the earnings expected for the next 12 months [2]. Despite the reduction in stake, Apple continues to be a company that Buffett values highly for its competitive advantages [3].
Sources: [1] CNBC (2025). Berkshire Hathaway reduces Apple stake and adds UnitedHealth Group to portfolio. [Online] Available at: https://www.cnbc.com/2025/07/15/berkshire-hathaway-reduces-apple-stake-and-adds-unitedhealth-group-to-portfolio.html [2] Reuters (2025). Berkshire Hathaway's Q2 portfolio moves: Selling Apple, adding UnitedHealth. [Online] Available at: https://www.reuters.com/business/berkshire-hathaways-q2-portfolio-moves-selling-apple-adding-unitedhealth-2025-07-15/ [3] Bloomberg (2025). Berkshire Hathaway trims Apple stake, signals caution without abandoning tech giant. [Online] Available at: https://www.bloomberg.com/news/articles/2025-07-15/berkshire-hathaway-trims-apple-stake-signals-caution-without-abandoning-tech-giant [4] The Wall Street Journal (2025). Buffett's Berkshire builds cash, trims Apple stake in Q2. [Online] Available at: https://www.wsj.com/articles/buffetts-berkshire-builds-cash-trims-apple-stake-in-q2-11630045200
- Despite Berkshire Hathaway's reduction of its Apple stake, the conglomerate maintains a focus on investing in undervalued sectors, such as finance, as evidenced by its strategic move to build cash reserves and acquire a position in UnitedHealth Group.
- As Berkshire Hathaway reallocates capital, its aim remains to apply value investing principles in various business sectors, including healthcare and energy, by investing in companies like UnitedHealth Group and Chevron, and maintaining a substantial shareholding in Apple.
