THE shares of Apple’s suppliers slumped after Berkshire Hathaway nearly halved its stake in the iPhone maker. The decline came amid a broad market selloff on Monday (Aug 5).
Taipei-listed iPhone assembler Hon Hai Precision Industry and chipmaker Taiwan Semiconductor Manufacturing slid about 10 per cent each. Among component makers Murata Manufacturing tumbled 15 per cent in Tokyo, while LG Innotek tanked as much as 13 per cent in Seoul and Luxshare Precision Industry fell 7.7 per cent in Shenzhen.
Berkshire Hathaway sold US$75.5 billion worth of Apple stock on a net basis in the second quarter, sending Warren Buffett’s cash pile to a record US$276.9 billion. The billionaire unloaded shares as US stock gauges climbed toward the peaks reached in mid-July, before the recent wave of profit-taking on the artificial intelligence (AI) rally.
“It should be hard for anyone to argue that this is not a market negative,” Mike O’Rourke, chief market strategist at Jonestrading, wrote in a report, referring to Berkshire’s sale of Apple shares.
Shares of Apple climbed 23 per cent in three months to June and touched a record high on Jul 16, as hopes grew for the company’s AI offerings. However, Apple’s new AI features won’t be ready in time for the initial launch of its upcoming iPhone and iPad software overhauls, Bloomberg News reported last week.
Buffett’s firm revealed in May that it had reduced some of its position in Apple during the first quarter of the year. Even after the latest sales, Apple remains Berkshire’s largest single position.
“It was expected that Berkshire would continue dialling back its position in Apple, although the magnitude of the drop will likely surprise some people,” Adam Crisafulli of Vital Knowledge wrote in a note. BLOOMBERG
