In a strategic shift, Warren Buffett’s Berkshire Hathaway has rebalanced its investment portfolio by reducing its holdings in Apple Inc. and initiating a significant investment in UnitedHealth Group. According to a recent filing with the U.S. Securities and Exchange Commission, Berkshire sold 20 million Apple shares during the second quarter of 2025, decreasing its position to 280 million shares valued at over $64 billion. Despite this reduction, Apple remains the largest stock holding in Berkshire’s portfolio.
Historical Context and Investment Strategy
Berkshire Hathaway began building its stake in Apple in 2016, recognizing the tech giant’s robust market position and consumer loyalty. At its peak in 2023, Berkshire owned more than 915 million Apple shares. Over the past two years, Buffett has gradually trimmed this position as part of a broader strategy to build cash reserves, which now exceed $344 billion. This approach reflects Buffett’s cautious investment philosophy, emphasizing liquidity and readiness to capitalize on future opportunities.
Leadership Transition at Berkshire Hathaway
Warren Buffett, who turns 95 later this month, has announced his retirement as CEO at the end of 2025. Vice Chairman Greg Abel is set to assume the CEO role in January 2026, while Buffett will remain as chairman. This leadership transition marks a significant moment for Berkshire Hathaway, as investors and analysts closely watch how the firm’s investment strategies may evolve under new leadership.
New Investment in UnitedHealth Group
In the same SEC filing, Berkshire disclosed a new $1.57 billion investment in UnitedHealth Group, acquiring 5.04 million shares. This move signifies Berkshire’s first foray into the health insurance sector, a departure from its traditional investment areas. Following the announcement, UnitedHealth’s stock experienced an 8.5% surge in after-hours trading, indicating positive market reception.
Challenges Facing UnitedHealth
UnitedHealth has faced a challenging year, with its share price declining by 46% due to rising costs, a federal investigation into billing practices, a cyberattack, and the tragic death of a former top executive. Buffett has previously described high U.S. healthcare costs as a tapeworm on the economy, highlighting the sector’s complexities. Berkshire’s investment in UnitedHealth suggests confidence in the company’s ability to navigate these challenges and capitalize on the growing demand for healthcare services.
Additional Portfolio Adjustments
The second-quarter filing also revealed that Berkshire reduced its stake in Bank of America and exited its position in T-Mobile. Conversely, the firm increased holdings in Chevron, Constellation Brands, and Domino’s Pizza. Berkshire also disclosed earlier confidential purchases in DR Horton, Lennar, and Nucor, indicating a diversified investment approach. Several of these stocks, including homebuilders DR Horton and Lennar, saw positive movement in after-hours trading following the disclosures.
Buffett’s Endorsement of Apple and Tim Cook
Despite the reduction in Apple holdings, Buffett has consistently praised Apple CEO Tim Cook for his leadership and the company’s growth. He has referred to Cook’s appointment by Steve Jobs as the right decision and acknowledged that Tim Cook has made Berkshire a lot more money than I’ve ever made. In response to Buffett’s retirement announcement, Cook expressed gratitude, stating that knowing Buffett has been one of the great privileges of his life and expressing confidence in Abel’s leadership.
Implications for Investors
Berkshire Hathaway’s recent portfolio adjustments reflect a strategic reallocation of assets, balancing technology investments with ventures into the healthcare sector. This diversification may be aimed at mitigating risks associated with overexposure to a single industry and positioning the firm to benefit from the evolving economic landscape. Investors may interpret these moves as indicative of Berkshire’s confidence in the long-term prospects of UnitedHealth and a cautious approach to tech investments amid market volatility.
Conclusion
Warren Buffett’s Berkshire Hathaway continues to adapt its investment strategy in response to market dynamics and internal leadership changes. The reduction in Apple holdings and the new investment in UnitedHealth Group highlight a deliberate effort to diversify the portfolio and capitalize on opportunities in the healthcare sector. As the firm transitions to new leadership, these strategic moves will be closely monitored by investors seeking insights into Berkshire’s future direction.
