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Warren Buffett, a longtime fan of Apple ( NASDAQ: AAPL ) stock, has cut his position in half based on regulatory filings. This is an ongoing trend with the most famous investor in history. Signs point to the fact that he has a good reason.
No one will ever know what made Buffett make his decision. It was not made after current events because the filing shows stock sales made weeks ago. However, he is known as the Oracle of Omaha for a reason. He can see problems beyond the horizon.
Apple’s latest stumble was its late move into the AI business. It made vague claims about its plans at the Worldwide Developers Conference in early June, which drove Apple’s stock higher.
More recently, Apple released its latest operating system to a few developers, not the general public. The full release will not happen until after the iPhone 16 launch in September. Apple is tempting customers to wait to buy the iPhone 16 until after the new AI-powered OS is available, which could dent sales significantly.
Apple’s recent earnings showed that, no matter the revenue improvement for other hardware products like the iPad or the growing Services business, the iPhone is still the engine of Apple’s revenue. An iPhone 16 disaster would be a terrible disappointment for investors. iPad sales have not saved Apple.
What did Buffett see when he looked at Apple a few months ago? No one will know, but it must not have been good.
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