Wall Street Analyst Warns Apple Stock Could Get 'Killed' And 'Would Not Be Surprised If Buffett Is Selling Right Now'
It's been a terrible year so far for Apple Inc. (NASDAQ:AAPL) investors, with the company's share price down about 7% year to date, compared to the roughly 9% gain the SPDR S&P 500 ETF (NYSE:SPY) has experienced during the same period.
Commonly cited reasons for the disappointing start to the year have been fears of lower demand in China, potentially falling behind in the artificial intelligence (AI) race, regulatory pressures and low growth.
Jordan Klein, an analyst at Mizuho, sees another major risk on the horizon, warning that things could get worse for Apple.
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Klein said he "would not be surprised if [Buffett] is selling right now" and that Buffett "knows when that 13F comes out showing he started to sell, that [Apple] shares will get killed as retail investors rush for the exit."
Berkshire Hathaway Inc.'s (NYSE:BRK) most recent 13F disclosed that Buffett sold some of his Apple stock, albeit a marginal 1% of his massive position.
News of Berkshire Hathaway selling more shares could put pressure on the stock given that the company owns 5.9% of all outstanding Apple shares, representing 42.8% of its entire stock portfolio.
While Buffett has said that his "favorite holding period is forever," Berkshire's portfolio has experienced turnover lately.
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In addition to trimming its Apple stock, Berkshire exited its positions in StoneCo Ltd. (NASDAQ:STNE), Markel Group Inc. (NYSE:MKL), Globe Life Inc. (NYSE:GL), and D.R. Horton Inc. (NYSE:DHI) as well as significantly trimming its stakes in HP Inc. (NYSE:HPQ) and Paramount Global (NASDAQ:PARA).
The D.R Horton stake in particular was built up as recently as the second quarter of last year.
Klein sees the stock as likely to lag the market until the company shares more about its AI plans, which he speculates might come as soon as June at the Worldwide Developers Conference (WWDC) developer event.
Dan Ives, a senior equity research analyst at Wedbush Securities, deems the situation a strong buying opportunity, giving Apple's stock a price target of $250 per share. He cites massive pent-up demand in the iPhone upgrade cycle and high expectations of "AI finally coming to Cupertino (in California)."
For long-term investors in Apple, it's paid to ignore short-term worries and stay the course. In the past five years, the stock has seen a more than 267% gain. Meanwhile, investors fortunate enough to have bought and held since its 1984 initial public offering (IPO) would be sitting on an over 142,000% gain.
The 13Fs are due within 45 days of a quarter ending, so investors waiting for the next updates on Berkshire’s portfolio will likely need to wait until mid-May.
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