Apple shares fall 7% after Warren Buffett’s Berkshire Hathaway cuts its stake by half

Warren Buffett sent shockwaves through the investment world this weekend by making major cuts Apple stakes halved, sending tech stocks tumbling on Monday amid the widening global sell-off.

Berkshire Hathaway disclosed in its earnings call that its Apple stock was valued at $84.2 billion at the end of the second quarter, indicating that Omaha’s Oracle has dumped just over 49% of the technology stake.

Shares of Apple fell more than 7% in premarket trading on Monday. Global stock markets are on the verge of a major correction, driven by concerns about an economic slowdown.

The 93-year-old legendary investor has been on a massive selling spree, selling more than $75 billion worth of stock in the second quarter and boosting Berkshire’s cash pile to a whopping $277 billion, a record high for the conglomerate. Buffett also began selling his second-largest stake bank of America in July.

Buffett had already sold 13% of his stake in Apple in the first quarter and he previously indicated that it was a tax-saving measure as he expected the US government to raise interest rates to finance a growing budget deficit. However, the volume of sales in the second quarter could mean that tax was not the only motivating factor.

Berkshire began buying the stock in 2016 under the influence of Buffett’s investing lieutenants Ted Weschler and Todd Combs. Over the years, Buffett grew so fond of Apple that he dramatically increased his stake to make it Berkshire’s largest, naming the tech giant its second-most important company after its cluster of insurers.

Berkshire’s Apple stake grew so large that it once took up half of its stock portfolio, so the sale is also believed to stem from portfolio management concerns.

Apple shares rose 23% to a record high in the second quarter amid renewed optimism about the potential of artificial intelligence.