There are some rumors and speculations that Warren Buffett tends to keep selling AAPL due to their recent pullbacks and potential risks faced by the EU, DOJ, and China.
However, my view is different: Warren Buffett has been an excellent investor and probably, he is the greatest investor of all time with his long lasting track record.
He is not a 100m sprinter, but a relentless marathon runner. It says his long term strategy.
As his core business is insurance, I am pretty sure that Warren Buffett though about all these potential risks before his decision to invest in AAPL.
That´s how an insurance company works by analyzing all possible and potential risks (
The another argument why he is not selling is: He can´t sell (if he would like to..)
He can't sell because a very high percentage of his capital tied down in Apple consists of embedded capital gains, over 80% at present market prices, meaning that if he sold, the IRS would take a huge chunk of Berkshire's capital in taxes.
The future will be like Coca Cola or American Express.
But as I said: He does not want to sell in real, because all potential risks facing now were considered by his own "due dilligence" before investing in Apple.
And you know: Warren Buffett HATES paying taxes.
Apple´s narrative is still there. The fundamentals are strong and solid.
However, Apple also brings some risks with their recent strategy:
- Apple plans to launch ads on TV+
- Apple plans to launch AI-driven ads on App Store.
- Not sure what Apple will launch at WWDC.
Their ad business is critical, because it is a contradiction of what Apple appeals for consumer´s privacy.
Ad means tracking users.
But Apple may lose $20 billion contract which has been paid by Google for their search on iOS if Google loses the antitrust case.
Apple also needs to allow all developers + consumers to sideload on App Store in the EU.
Apple must cover all these potential losses by bringing ads on TV+ and App Store.
But Apple may face a lot of sensitive consumers and loyal consumers due to a potential privacy issue.
It is clear: Apple becomes less attractive than before.
AI is a "buzzword" and how AI will increase the productivity (if the productivity is given, what % increase of the productivity???), nobody knows.
But the market seems to bet on a 100% or 200% productivity increase driven by AI, which may end with a carnage and huge disappointment.
But Apple needs to deliver "WOW"-effects at WWDC. Otherwise, the market will punish Apple again.
Apple needs to come up with fresh new ideas, which have never been introduced by Samsung or Google before.
At least, Tim Cook calls the upcoming AI event "incredible breakthrough".
