Buffett's Bet on Apple and BOA

Apple and TSMC Move Pay Off

According to its last 13F filing, Apple was the largest stake in Buffett's portfolio, with nearly 40% of the weighting. Over the last quarter, Buffett has added to his hoard of Apple stock, buying up $600M following a dip in the stock price back in March. During Berkshire Hathaway's last general meeting, Buffett said he approved of CEO Tim Cook in particular because of the stock repurchases that help support the value of the company's shares. A practice that Berkshire Hathaway uses quite liberally, returning $2.6B to shareholders through buybacks last year. The bet has paid off, with Apple reporting better-than-expected earnings after the close on Thursday, thanks to a surprise pick up in iPhone sales.

However, Buffett isn't all-in on tech, and through the last quarter, he divested his stake in TSMC over geopolitical tensions. The sudden sale was seen as usual and came at the height of tensions between Washington and Beijing, as the Oracle of Omaha wanted to avoid risk. He is also famously averse to crypto.

Insurance and Railways Perform

The second largest company in Berkshire Hathaway's portfolio is Bank of America (11% of holdings), which has remained on the sidelines of the latest banking turmoil in the US. As also the second largest bank in the country, it has benefitted from the shift of depositors to safety. But it has also not moved to buy any distressed assets.

Berkshire Hathaway is expected to see earnings increase to $3.58B on improved revenue of $83.4B, the bulk thanks to increased profits from its wholly-owned units in the insurance and railroad businesses. Periods of uncertainty typically support insurance companies and higher interest rates, which could continue to support Berkshire Hathaway if the Fed keeps its promise to hold rates high for at least the end of the year.

Stock at 1-Year High After Flag

The share price of Berkshire Hathaway (Class B) - a.k.a Buffett's stock price - has been moving up impulsively since last October's low of $260, reaching a 1-year high at $332 on May 1st after concluding a flag at $293. Typically, the length of the wedge can project where the next directional leg could end, which is settled around $345 when added to the breakout point. Losing the short-term support at $317 will expose $307 and might open the door to as low as $292 if the  $300 handle breaks.

Key Takeaways

Berkshire Hathaway will report its earnings after facing issues in the banking sector and railway accidents. The company has benefitted from the shift of depositors to safety and moving into Apple. Apple is the most significant stake in Berkshire Hathaway's portfolio, accounting for nearly 40% of the weighting. The compan