Prior to Apple stock’s value recovery after a better than expected quarter, one hedge fund got rid of all of its holdings in the iPhone maker, and another went in big.
According to filings with the Securities and Exchange Commission made on Wednesday, two big hedge funds flipped around their Apple holdings. For starters, Coatue Management got rid of all of its shares.
Coatue started the quarter with 2.4 million shares in Apple worth around $470 million at the time. By the end of March — and before Apple’s recovery in April — it had sold all of them.
On the other hand, Viking went in big. It bought more shares than Coatue sold. To date, Viking holds about $664 million in shares, according to a report on Thursday morning by Reuters.
Coatue wasn’t the only big firm to cut. Berkshire Hathaway’s Q1 earnings report revealed that it cut its stake in Apple by 13% over the period. Apple remains Berkshire Hathaway’s biggest holding, with it holding around $135.4 billion in Apple stock.
During the first calendar quarter of 2024, analysts consistently downgraded Apple before the company’s surprisingly positive results. The did so in particular because of falling iPhone demand in China.
JP Morgan, for instance, cut its target price and said that while Apple will get a boost from introducing AI features to the iPhone, it won’t do so until 2025 and the iPhone 15. Morgan Stanley insisted that it remained bullish on Apple, yet also cut its stock price.
Apple’s earnings report on May 2, 2024, did confirm that iPhone sales are notably down in China — but not nearly as bad as the up to 25% decline that was forecast by some. Apple’s stock price rose sharply after the earnings report, based on the company’s resilience with a mix of hardware and software, and the promise of AI features coming soon.
As a consequence, most analysts have reversed their opinion of whether investors should buy Apple stock. Morgan Stanley was the first to raise its target price again, although its new $216 figure is still down from earlier in the year.
There are signs, however, that Warren Buffett’s strategy with Apple may not be related to short term issues with the shares and instead is part of the firm’s move away from technology firms. The first calendar quarter of 2024 was the second quarter in a row where Berkshire Hathaway sold Apple shares.
Coatue’s move was similar. It cut back reliance on most tech firms too, but did buy a large quantity of Google stock.
Buffett has also cut Apple shares before, although in 2021 he said a recent round of selling shares had been “probably a mistake.”
Apple is bullish on the quarter, and is expecting single-digit increases in revenue over the year-ago quarter. Apple stock is about flat on the year, with it having a rough February and March, buoyed by a recovery of almost all it lost on the year in the hours after the fiscal second quarter earnings.
