Warren Buffett's decision to shed three-quarters of Berkshire Hathaway's Apple stake in his final nine quarters as chief executive has left the conglomerate with up to $112 billion in unrealized gains, a paper loss that underscores the tension between valuation discipline and momentum in a market that stopped listening to fundamentals.
The trade that defines the exit
Berkshire held more than 915 million Apple shares worth $156.8 billion at the end of September 2023, a position that commanded over 40 percent of the equity portfolio. Over the next nine quarters Buffett sold 687,642,574 shares, a 75 percent reduction executed while he was still CEO. The shares he parted with would have nearly doubled in value by early October 2026, when Apple traded at almost 38 times forecast 2026 earnings versus a trailing price-to-earnings ratio just above 10 when Berkshire first bought in 2016.
The stated rationale was tax, not price
At the May 2024 annual meeting Buffett framed the sales as tax management. "It doesn't bother me in the least to write that check... if I'm doing it at 21% this year and we're doing it a little higher percentage later on, I don't think you'll actually mind the fact that we sold a little Apple this year," he said. The corporate rate was 21 percent at the time; Buffett argued it would climb. He did not cite Apple's valuation as the driver, though the stock's multiple had already expanded well beyond the level that originally attracted him.
Valuation discipline as a consistent signal
The Apple reduction was part of a broader pattern: Buffett was a net seller of equities for 13 consecutive quarters before his retirement on December 31, 2025. The source notes Apple's higher-margin services business is an "undeniable catalyst" but argues the company "simply isn't growing quickly enough to justify a forecast P/E ratio of 38 in 2026." From a structural standpoint, the sale removed the single largest concentration risk in a $350 billion portfolio now run by Greg Abel.
What the portfolio structure reveals
Abel inherits a portfolio that has been deliberately de-risked at the cost of historic paper gains. The source does not disclose whether the Apple proceeds were redeployed, held in cash, or used for buybacks, nor does it specify any break fee or condition tied to the sales. What is clear is that Buffett chose to realize gains at a known tax rate rather than hold a position whose multiple had detached from its growth trajectory, a decision that looks expensive only if the multiple sustains.