Berkshire's Apple Sell-off Accelerates – and Warren Buffett's Cash Strategy Signals Caution

Billionaire Warren Buffett is the world's most watched investor, and his investments at his conglomerate Berkshire Hathaway (BRK-B) always make investors sit up. That's why some of his recent moves – in particular, his massive cuts to his longtime Apple (AAPL) stake – may frighten you.

That's because Buffett has been jettisoning huge tranches of his Apple stock, which he began purchasing in 2016. Buffett is known as a long-term investor. In fact, in the 1988 Berkshire Hathaway letter to shareholders, Buffett wrote:

In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.

That doesn't mean Buffett never sells, but he always has a reason.

After holding AAPL shares for years and earning tens of billions on them, why is now the time to sell?

It appears that Buffett is raising cash quickly – and the details may chill you.

Berkshire Has Been Slashing Its Apple Stake

Apple has been a huge winner for Berkshire. After first purchasing shares in 2016, Buffett and investing lieutenants Ted Weschler and Todd Coombs added to the position in later years. They amassed more than one billion shares in a little more than two years of buying.

The stock continued to appreciate as Apple grew earnings and made huge share repurchases. At one point, the position had grown to become about half of Berkshire's equity portfolio.

Then, after holding the stake in Apple for years and with only modest cuts between 2018 and 2022, Buffett and company began paring it significantly in late 2023. From about 906 million shares at the end of 2023, they reduced it to 300 million shares by the third quarter of 2024.

Berkshire then held steady for three quarters, but it subsequently cut a further 62 million shares in the past two quarters (through Q3 2025). And more sales could be on the way...

So, what does the Oracle of Omaha see that many investors don't see?

As the quote above shows, Buffett isn't quick to sell. As long as he sees significant upside, he can stick it out for decades. Case in point: He's held shares of Coca-Cola (KO) since he began buying them in 1988. Coca-Cola spins out a juicy quarterly dividend to investors, too. For Berkshire, that quarterly payment amounts to just more than $200 million.

And the issue isn't purely about tech stocks, which Buffett has long said he doesn't understand. Berkshire revealed a $4.3 billion stake in Alphabet (GOOGL) in the latest quarterly filing.

This Magnificent Seven stock is up more than 100% from its 52-week low, and Berkshire likely spotted a bargain valuation on a dominant franchise. The stake with Alphabet is a tiny fraction of what remains of Berkshire's Apple stake – around $67 billion at recent prices. It's not a needle-mover.

So, the issue may well be Apple's significant valuation and exposure to consumer spending, against a backdrop of a booming stock market that offers few values.

Apple is no longer trading for a price-to-earnings (P/E) multiple in the high single digits or low double digits, where it sat around the time when Buffett began buying. Now, it's priced at 34 times this year's expected earnings. In comparison, Alphabet trades at less than 31 times earnings – AFTER its big move higher.

Of course, it's not just Apple that looks expensive. If Buffett could access a large company trading at an attractive enough price, he would be putting cash to work. And he did do that in the third quarter with Alphabet. So, Buffett seems to think that many large stocks are too pricey.

And that seems borne out by the P/E multiple on the S&P 500 Index, which sits around an estimated 28 times earnings and is dominated by large-cap tech names. For some context, that P/E reading is well above the 25-year average of 23.5.

That may be leading some to think that the market has hit its peak – here's what one expert sees for 2026.

Buffett's not timing the market so much as calibrating his purchases against the value he sees. And recently, he hasn't been seeing very much value in the market. So, Buffett's process means that Berkshire is signaling to investors that the stock market looks expensive to him.

And as Berkshire holds back on stock purchases, capital piles up on its balance sheet.

How Much Cash Does Berkshire Hathaway Have?

Berkshire's stock sales have helped fatten its war chest, but it has been piling up cash significantly in the past few years. As of the end of the third quarter 2025, the company had amassed $382 billion in cash and equivalents, with most of that stuffed in Treasury bills.

In absolute terms, this cash hoard is the most the company has held ever. Berkshire has ballooned over the years, and its subsidiaries pump out billions every year. But Buffett and his lieutenants have seen fit to sit on much of that cash rolling in.

The $382 billion is also the largest Berkshire has ever amassed on a relative basis, specifically to the value of its assets, for at least the past 35 years. Currently, Berkshire has about 31% of its total assets in cash. Absolutely enormous.

In other words, nearly one-third of Berkshire's assets are parked in low-yielding T-bills, rather than potentially higher-earning stock investments or even purchases of whole companies.

Cash is not Buffett's preferred destination for Berkshire's capital. It is just a place to park money between making the investments that earn the real money.

But cash is better than stocks if equities such as Apple look expensive. And Buffett has been quite prescient in having cash when the market is poised to decline:

• Berkshire's cash spiked in 1999, just on the eve of the dot-com bust. Buffett quickly put most of that cash to work by 2000.

• Berkshire's cash pile also ran up heavily in the years leading up to the great financial crisis, swelling to more than 24% of its total assets. That cash allowed Berkshire to get some sweetheart deals during the ensuing fire sale.

And this time Berkshire's cash hoard is even higher in absolute and relative terms.

Here's the good news for investors: The investment opportunities available to Buffett are very different from those available to individuals. Here's why.

Should Buffett's Pile of Cash Worry You?

While Buffett's move to cash may be chilling, you may not want to follow his lead. Or, to put it another way, you may have a lot of opportunities that this legendary investor no longer has.

Berkshire's size and war chest are a real impediment to its investment returns. Berkshire Hathaway now carries a market capitalization of roughly $1 trillion. And as shown above, the company is sitting on hundreds of billions of dollars of dry powder. That makes investing in smaller companies a nonstarter. They just won't move the needle anymore. And these smaller securities just can't absorb the sort of buying power that Berkshire needs to deploy to see a reasonable return.

So, Buffett is limited to buying large, highly liquid stocks such as the Magnificent Seven, including that recent purchase of Alphabet.

He's lamented the drag created by Berkshire's large size for years, even if it's a cost of success. Here's Buffett in his farewell letter to shareholders earlier this year:

In aggregate, Berkshire's businesses have moderately better-than-average prospects, led by a few non-correlated and sizable gems. However, a decade or two from now, there will be many companies that have done better than Berkshire; our size takes its toll.

So, there are tons of stocks that could double and triple or more, and they're simply off-limits to Berkshire and other deep-pocketed investors.

And it's the key reason that, even if you believe Buffett is piling up cash in expectation of a downturn, you may still have great opportunities in the stock market for outstanding profits.

It's also why investing in lesser-known stocks can be so profitable. Individuals can access the opportunities that are untouchable to the big guys. Plus, with small stocks you can still "play" the big trends in the market, such as AI, while enjoying strong upside for years, even decades.

One former hedge-fund manager known for spotting early winners is sounding the alarm once again. He called Netflix at $7.78 (up 4,200% since), Apple at $0.35 (up 20,000%), and Amazon at a split-adjusted $2.41 (up 3,200%).

Now, this renowned investor just released a new list of his favorite AI stocks... and not a single Magnificent Seven name made the cut. Instead, an AI stock you've likely never heard of was just flagged as "near perfect" in his new investing scoring system.

Click here to watch his brand-new presentation, where he reveals the name, ticker symbol, and why this could be the smartest AI move of the year... especially if you're older than 50.