Apple Stock in Focus After Berkshire Reduces Holding—Monitor These Key Price Levels

Key Takeaways

• Apple shares are in focus Monday after Warren Buffett’s Berkshire Hathaway reduced its Apple shareholding in the iPhone maker by 13% in the first quarter, according to the conglomerate’s earnings report released on Saturday.
• Buffett told shareholders at Berkshire’s annual meeting that his view on Apple’s business hadn’t changed and that the tech giant will likely remain the conglomerate’s largest stock holding at the end of 2024.
• Amid further upside, Apple shares may find resistance around $196 near the top trendline of a trading range but could fill a gap near $173 during periods of weakness.

Shares in Apple (AAPL) may see heightened volatility Monday after Warren Buffett’s Berkshire Hathaway (BRK.B) significantly reduced its exposure to the iPhone maker in the first quarter, according to the conglomerate’s earnings report released on Saturday.

As of March 31, Berkshire’s stake in Apple, its largest holding, totaled $135.4 billion, implying that the Omaha-based company sold about 116 million shares, or 13% of its holding, in the quarter, leaving it with a balance of around 790 million shares in the tech giant.

Interestingly, the reduction marks the second consecutive quarter that Berkshire has trimmed its stake in Apple, with filings revealing that the conglomerate offloaded around 10 million Apple shares in the fourth quarter, though those sales equated to just 1% of its enormous stake in the Magnificent Seven member’s stock.

Buffett Says Apple Likely to Remain Largest Holding

Despite the quarterly sales taking a sizeable bite out of Berkshire’s Apple holding, Buffett assured investors at the company’s shareholder meeting on Saturday that his views on the tech giant’s business hadn’t changed, adding that it’s “extremely likely” that Apple will remain Berkshire’s largest stock holding at the end of 2024. When asked whether his view on Apple had changed, the Oracle of Omaha told shareholders that he thought Apple is an even better business than American Express (AXP) and Coca Cola (KO), two of Berkshire’s other large holdings.

Buffett’s remarks helped alleviate investors’ concerns that Berkshire was reducing exposure to Apple over valuation concerns following its 48% gain in 2023 and forward earnings multiple of 28 times. Still, the stock may face short-term price fluctuations as investors digest Berkshire’s latest sales in the stock.

Monitor These Chart Levels Amid Heighted Volatility

Apple shares have oscillated roughly within a 30-point trading range since August 2023, with the price testing the pattern’s upper and lower levels several times over the past eight months. More recently, the stock gapped above the 200-day moving average on Friday after posting a better-than-expected earnings report. 

If the shares continue to see follow-through buying, investors should monitor the $196 level, an area on the chart where the price may encounter overhead resistance from the range’s top trendline. However, during periods of weakness, watch for a potential gap fill down to around $173, which sits in close proximity to the 50-day moving average.

Apple shares were down 0.5% at $182.42 at around 7:00 a.m. ET. Through Friday’s close, the stock had lost about 5% since the beginning of the year.

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