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Buffett's sale of Apple sparked heated discussions. What did the "stock god" see? Why did he reduce his holdings so drastically?

Some analysts interpreted this as Buffett's lack of confidence in Apple's growth prospects, while most Wall Street analysts called on investors to remain calm and not over-interpret this move.

According to media reports on Monday,Most analysts believe that investors do not need to overreact, and Apple's strong financial condition, brand loyalty and potential in areas such as artificial intelligence mean it remains an attractive long-term investment option.

Berkshire Hathaway sold nearly half of its Apple stake in the second quarter, bringing the value of its holdings down to around $84 billion today from about $140 billion at the end of March, according to data released Saturday.

It is worth noting that this reduction occurred during a period of sharp rise in US stocks, when Apple's stock price rose by 23% and the S&P 500 hit new highs. And this is not the first time Berkshire has reduced its holdings in Apple. At the annual shareholders' meeting in May, Berkshire revealed that it reduced its holdings in Apple in the first quarter. At that time, Buffett hinted to investors that the reduction was related to tax factors.

Is it for risk management?

Since Buffett first disclosed his investment in Apple in 2016, Apple's stock price has soared nearly 900%, generating billions of dollars in unrealized profits for Berkshire.Given this backdrop, many analysts believe the sell-off is more about risk management than a question of Apple's long-term prospects.

Joe Gilbert, senior portfolio manager at Integrity Asset Management, said:

Buffett's reduction of Apple holdings is only for risk management considerations. If there are any concerns about Apple's long-term prospects, Buffett will completely sell out. Similar to Berkshire's reduction of other stock positions, Buffett has considerable unrealized gains on Apple stock.

Cathy Seifert, research analyst at CFRA, noted:

Even after this reduction, Apple remains Berkshire's largest single holding. If you have a position this large, you would take profits and reduce some of the concentration risk, as Berkshire's portfolio is still quite concentrated.

Some analysts also pointed out that Berkshire's reduction in holdings may be related to broader concerns about the economic outlook. The employment data released last Friday was lower than expected, which triggered market concerns about a recession, causing the Nasdaq to fall into a technical adjustment range and the VIX index approaching 25.

It is worth mentioning that Berkshire announced the portfolio changes a few days before Apple released its quarterly earnings report, which showed that the company's revenue returned to growth and hinted that new AI features will drive iPhone sales growth in the coming quarters.Despite a pullback in tech stocks, Apple shares held steady after the earnings report and ultimately ended the week with a gain.

Several analysts, including Wedbush analyst Dan Ives, remain bullish on Apple’s future, with Ives noting:

Apple is in the middle of a major upgrade cycle that will drive revenue growth in 2025 and 2026. While some may interpret this as a sign of low confidence, Apple just delivered a strong quarter and with an AI-driven super cycle ahead, we don’t think now is the time to exit.