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Investors Business Daily
Investors Business Daily
Business
MATT KRANTZ

Warren Buffett Relies On 8 Stocks Now That Apple Is Crumbling

Warren Buffett's big-time faith in Apple is hurting Berkshire Hathaway now. Good thing he's got some other S&P 500 winners to count on.

Eight U.S.-listed stocks in Buffett's Berkshire's portfolio, including firm Charter Communications, financial Markel Group and T-Mobile US, are up since the S&P 500 hit its high this year on July 31, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.

Those gains are welcome as Buffett's favorite stock — by far — hits the skids. Apple, which accounts for 55% of Berkshire Hathaway's U.S.-listed stock portfolio is down 8% since July. The value of Berkshire Hathaway's position in the stock is down a mind-boggling $14.4 billion in just two-and-half months.

Lagging Apple Hurts Berkshire

A highly concentrated portfolio is great when the stocks are working. But since July, Berkshire Hathaway's picks are mostly hurting, too.

Nearly 84% of Berkshire Hathaway's 49 U.S.-listed stocks are down since July 31. And his average stock is down more than 11% since then, putting them squarely in a correction. In fact, 33 of Buffett's holdings, or roughly two-thirds, are falling more than the S&P 500 in the pullback.

Meanwhile, when a giant holding slips, like Apple is, that's a big hole for the rest of the portfolio. Berkshire Hathaway is the No. 3 largest owner of Apple with 5.9% of shares outstanding.

Apple's stock is still up nearly 39% this year. But the concern is how it's behaving since Treasury yields started to rise and its latest phone debuted to meh reviews. Apple's drop is worse than the S&P 500's 5.4% decline in that time.

But of more concern, Apple is falling even as fellow tech giants Alphabet and Meta Platforms rise 4.7% and 1.7%, respectively, from late July. And analysts think Apple's adjusted profit per share will fall 1% this fiscal year.

So what's working for Berkshire Hathaway now?

Winning Bets In Communications

Big rallies since July are starting to make a difference in Berkshire Hathaway's portfolio. Take Charter Communications, Buffett's top stock since July 31 gaining 10.5%.

It's such a powerful rally shares of the cable operator are now up 32% this year, nearing Apple's run. If there's any knock, though, it's that Berkshire Hathaway doesn't own enough Charter to move the needle. Its 3.8 million shares is less than 1% of Buffett's portfolio. That means even the double-digit gain since July only added $163.6 million in value.

The same goes with T-Mobile. The shares are up 2.3% since July 31. But since Berkshire Hathaway only owns less than 1% of the company, that gain barely makes a dent with a $16.7 million gain.

Energy firm Occidental Petroleum is the only gainer big enough to add more than a rounding error-worth of value for Berkshire Hathaway. Buffett owns a quarter of the stock, accounting for about 5% of the portfolio. But it's only up 0.1% since the pullback — not a huge contributor.

So while Buffett has some winners — he really needs Apple to bounce back. His portfolio is riding on it.

Warren Buffett's Top Stocks During The Pullback

Up since the S&P 500 topped this year on July 31

Company Symbol % ch. from July 31, 2023 % of Berkshire Hathaway's U.S.-listed portfolio Sector
Charter Communications 10.5% 0.6% Communication Services
Markel Group 2.5% 0.2% Financials
T-Mobile US 2.4% 0.2% Communication Services
Aon 1.9% 0.5% Financials
Activision Blizzard 1.8% 0.5% Communication Services
Mastercard 1.4% 0.5% Financials
Globe Life 1.1% 0.1% Financials
Occidental Petroleum 0.1% 4.7% Energy
Apple* -8.0% 55% Information Technology
Sources: IBD, S&P Global Market Intelligence, * — shown for comparison
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