Berkshire's Apple Exit: AXP Becomes New Top Pick
💡 Key Takeaway
Berkshire Hathaway is transitioning from Apple to American Express as its largest holding, signaling a major portfolio shift under new leadership.
The Great Berkshire Portfolio Reshuffle
This marks a historic transition for Berkshire Hathaway as Warren Buffett officially retired on December 31st, ending his decades-long leadership of the $319 billion investment portfolio. His successor Greg Abel has taken the reins, promising to maintain Buffett's core investing principles while inevitably implementing some changes.
The most significant shift involves Apple, which has been Berkshire's largest holding for nearly a decade. Despite Apple's loyal customer base and massive share buyback program that retired 44% of outstanding shares, Buffett became a persistent seller in his final years. Between October 2023 and December 2025, Berkshire sold 687.6 million Apple shares, reducing its stake by 75%.
Buffett framed this selling as tax-advantaged maneuvering since Apple represented a substantial portion of Berkshire's unrealized gains. However, the valuation math also changed dramatically - Apple now trades at 33 times earnings compared to the 10-15 times multiple when Buffett first invested in 2016.
This massive selling opens the door for American Express to become Berkshire's new top holding. As of February 19th, Apple represented $59.4 billion of Berkshire's portfolio while Amex stood at $52 billion. Just three years ago, Apple's position was six times larger than Amex's.
Why This Portfolio Shift Matters to Investors
This transition signals a fundamental change in how Berkshire values its holdings under new leadership. While Apple represented growth and innovation, American Express embodies the classic Buffett value investing approach that new CEO Greg Abel appears committed to maintaining.
The fact that Buffett designated Amex as one of eight 'indefinite' holdings in his final shareholder letter speaks volumes about its perceived stability. Unlike Apple, neither Buffett nor Abel has shown any desire to sell American Express shares, giving it clear runway to become the portfolio's largest position.
American Express benefits from several competitive advantages that align with Berkshire's investment philosophy. Its double-dipping revenue model earns fees from both merchants and cardholders, while its affluent customer base provides recession resilience. The company grows in lockstep with the U.S. economy during expansion periods.
Perhaps most impressively, Berkshire's cost basis for Amex shares is just $8.49, meaning the current $3.28 annual dividend represents a nearly 39% yield on cost. This income-generating capability makes Amex exactly the type of 'forever holding' Buffett championed throughout his career.
Source: The Motley Fool
Analysis generated by Bobby AI quantitative model, reviewed and edited by our research team. This is not financial advice. Always do your own research before making investment decisions.
Bobby Insight
Berkshire's portfolio shift toward value stocks like AXP represents smart repositioning rather than concerning turnover.
The move from expensive growth stocks to reasonably valued dividend payers aligns with timeless investing principles. American Express's strong fundamentals and recession-resistant business model make it an ideal cornerstone holding for Berkshire's new era.
What This Means for Me
