Warren Buffett and Jeff Bezos have sold billions of their tech holdings. What are they thinking?
Matthew Lynn City columnist
City view
Warren Buffett’s Berkshire Hathaway conglomerate has been a huge shareholder in Apple for many years, holding more than $170bn worth of shares. The company ticks all of Buffett’s key investment criteria, such as generous margins and a market position that is so strong it is almost impossible for rivals to challenge. It has made him huge sums of money since he started accumulating the position 20 years ago. And yet Buffett might be having second thoughts. Last week it emerged that the company has trimmed its stake, selling shares worth $2bn from its portfolio. That could have been part of a simple tidying up of its holdings. But it may also be a sign that it is losing confidence in the company.
Likewise, Jeff Bezos has sold shares worth almost $4bn in Amazon over the last month, taking his stake in the business he founded almost 30 years ago down to 9.6%. The move may well be linked to his recent move to Florida. It doesn’t have a state capital-gains tax, so he will save the 7% levy on the sale he would have had to pay back in Washington (although he will still have to pay the federal capital-gains tax). Even so, it is hardly a vote of long-term confidence in the company. After all, it is hard to believe Bezos is short of money for day-to-day living expenses, or that he needs the money urgently.
The new disruptors
Both sales may be a sign that the top of the tech boom has already arrived. The major computing and internet companies have been on a huge bull run over the last ten years, easily beating any other investment. Apple’s shares have risen tenfold over the last decade, and are close to their all-time highs; Amazon’s share have risen eight-fold over the last ten years, and are also close to the highest point they have ever reached. The same is true for all the other tech giants. Even Meta, the owner of Facebook, which crashed after a muddled move into virtual reality, is now soaring again.
Yet it is not hard to make a case that we are seeing the top of the market. Values are stratospheric. Apple and Amazon are trading at more than 20 times their annual earnings, based on the assumption that they can maintain the turbo-charged growth of the last decade. Artificial intelligence (AI) is making incredible progress. ChatGPT, the global leader so far, has alrea
