Warren Buffett’s Berkshire Hathaway dumps TSMC, buys more Apple

Berkshire Hathaway made a near-complete exit from Taiwan Semiconductor Manufacturing Co. (TSMC) just three months after pumping $4.1 billion into the chipmaker.

Warren Buffett’s company slashed its holding of TSMC’s U.S. depository receipts by 86% to 8.3 million shares last quarter, sending the chipmaker’s stock tumbling 4% on Wednesday (February 15).

Generally opposed to technology investments, the purchase of TSMC was an unexpected move by the ‘oracle of Omaha’, but it made sense given that the company is a key supplier for ‘Berkshire’.heirloom” Apple. Now the rapid elimination out of character of Buffett – he is famous for his “buy and hold” philosophy, once tell the shareholders“If you’re not ready to own a stock for ten years, don’t even think about owning it for ten minutes” – chills investor sentiment toward the world’s largest foundry.

Berkshire Hathaway shuns tech stocks…

Berkshire dabbles in technology, but barely. And it broke the rules of dress.

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Buffett was called a ” silly” for not having invested in Amazon until 2019, but still kept its exposure low, with the e-commerce giant representing only 0.5% of the company’s portfolio. The stake Berkshire bought in HP last year includes Less than 1% of his portfolio.

She held stakes in IBM and Intel, but exhausted. In the first quarter of 2022, Berkshire sold almost everything of its $8.3 billion stake in Verizon from the end of 2020.

More recently, there have been signs of reluctance over the rapidly growing and shrinking stake in the manufacturer of the Call of Duty video games. While Berkshire increased its participation of Activision Blizzard at 9.5% in anticipation of the takeover by Microsoft last May, it reduced to 6.7% by the end of the year, as Microsoft battled regulatory headwinds to see the deal through to the finish line.

…unless it’s Apple

The only tech stock the Oracle of Omaha can’t get enough of is Apple. A relatively modest $1 billion investment in 2016 became Berkshire Hathaway’s largest holding, so much so that Buffett considers Apple his “third company” rather than a stock he owns.

The consumer tech company is not the typical tech player. While its iPhones and iPads are popular, the hardware side of the business is vulnerable to supply chain disruptions. But amid the fluctuations, its bright spot is its booming service revenues. Subscriptions and services give the powerful brand competitive advantages beyond technology, making Buffett’s position more aligned with his core investment philosophy after all.

Berkshire Hathaway portfolio companies in numbers

49: Total number of companies in Berkshire Hathaway’s portfolio

The impact of the loss of TSMC shares

$4.1 billion: How much Berkshire spent buying TSMC stock, according to its November 2022 disclosure

$3.7 billion: How much the sale would have made assuming she sold them at the average price over the period

$68.5 and $74.5: How much Berkshire likely bought and sold TSMC stock for respectively, according to calculations by CFRA Research analyst Cathy Seifert. “Berkshire made a small profit on TSMC. It wasn’t a huge, huge win for Berkshire,” Seifert said.

ten%: TSMC’s annual budget cut in October 2022 after the Biden administration imposed new restrictions on China’s access to critical technologies. The chip industry is still grappling with covid-related issues and the pitfalls of the US-China trade war, which range from suppressing business to increasing base-laying costs national all over the world.

The other big sales were in finance

91%: How much of its stake in US Bancorp Berkshire gave up in the quarter ended December 31, 2022, reducing it to less than 7 million shares worth less than $300 million

60%: How much of its stake in BNY Mellon Berkshire has cut, reducing it to less than 7 million shares worth $1.1 billion

The Big Buy: Apple

$3.2 billion: How much Berkshire spent expanding its Apple stake in the quarter ended December 31, 2022, buying an additional 20.8 million shares

$138 billion: Berkshire Hathaway’s stake in Apple

40%: Apple’s percentage in Berkshire’s portfolio, its largest stake

5.8%: Share of public shares of Apple held by Buffett’s conglomerate