Billionaires decide to sell shares of this well-known stock

Following the investment moves of billionaires isn’t a foolproof strategy, but it can help inform your own decisions, as many of the top investors have gotten rich through their stock-picking skills.

It should come as no surprise that Apple (AAPL 1.16%) is a popular stock to own among billionaires. The iPhone maker is once again the most valuable company in the world, with a market capitalization of $3.4 trillion. This is one of the reasons why stocks are attractive to the wealthiest investors. Many of them own hedge funds worth tens or even hundreds of billions of dollars, so they need to invest in companies that are big enough to move the needle.

Another aspect is that Apple enjoys substantial competitive advantages due to its installed base of approximately 2 billion devices, its dominant brand in consumer electronics and high-margin businesses such as the App Store, which typically allow the company to collect 30% of money spent inside apps.

However, some investors appear to be turning bearish on the stock based on 13-F filings. Let’s take a look at the first billionaire-led hedge funds to sell stocks in the second quarter.

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1. Warren Buffett’s Berkshire Hathaway

Berkshire Hathawayselling Apple was his biggest move of the quarter and surprised a number of Buffett watchers.

The Berkshire boss has long sung Apple’s praises, calling it his company’s third venture at one point and complimenting the company on the strength of its businesses. Buffett did not directly address the reasons for the sale of Apple stock in the second quarter, in which Berkshire sold about 400 million Apple shares, or $80 billion of the stock, cutting its stake in half.

In previous comments, Buffett suggested that tax concerns were a reason for the sale. With talk in Washington of raising the capital gains tax rate, Buffett appears to have taken the opportunity to lock in Berkshire’s massive gains in Apple, avoiding the risk of capital gains taxes rising.

Buffett has also raised cash by selling other stocks, a sign some say he may think the stock market is overvalued.

2. DE Shaw of David Shaw

Billionaire David Shaw’s hedge fund DE Shaw has long been a major shareholder in Apple, ranking as a top holding for more than a decade. That investment paid off handsomely during that time, as Apple grew roughly 10-fold.

However, DE Shaw decided to reduce the stake in the second quarter, selling 4.8 million Apple shares worth about $10 billion, leaving the company with 10 million Apple shares.

It’s unclear why Shaw sold the stock in the second quarter, but it’s possible the firm believed the stock was overvalued after a second-quarter surge.

Apple is still DE Shaw’s second largest holding, just behind Microsoft.

3. Susquehanna International by Jeff Yass

Finally, the third billionaire to sell Apple shares in the second quarter was Jeff Yass.

Yass is known for having a massive stake in TikTok. His firm Susquehanna is known for its quantitative approach.

Susquehanna sold 2.6 million Apple shares in the second quarter, worth about $500 million. That left Susquehanna with 6.2 million shares worth about $1.3 billion.

Susquehanna’s current portfolio is built around options positions in high-profile stocks, and its largest stock holding is S&P 500 SPDR ETF.

Should you sell Apple?

Apple stock is expensive right now, trading at a price-to-earnings ratio of 33, and the jury is still out on Apple Intelligence, which has yet to be released to the public. Apple’s Glowtime event, during which it launched the iPhone 16, also failed to excite investors, as the stock ended September 9 basically flat.

However, selling Apple stock seems like an overreaction right now, especially with a potential sales boost on the way thanks to Apple Intelligence. Still, given its valuation, the stock’s upside is likely limited at this point.