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Buffett Sells $32 B of Apple Shares, Pours $43 B into AI Company

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  Published in Stocks and Investing on Saturday, November 22nd 2025 at 4:27 GMT by The Motley Fool

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Warren Buffett Pulls Out $32 B of Apple Shares and Plugs $43 B into a Hot AI Stock

In a headline‑making move that has sent ripples through the Wall Street universe, Warren Buffett’s Berkshire Hathaway sold a $32 billion block of Apple Inc. (AAPL) shares and, almost immediately, invested $43 billion in what the news outlets are calling a “hot” artificial‑intelligence (AI) company. The transaction—completed on the last trading day of 2023—marks a rare reversal in Buffett’s long‑standing aversion to high‑growth tech names and underscores his growing belief that AI represents the next frontier for value‑creating, long‑term business models.

The Apple Exit

Buffett’s Apple stake has long been one of Berkshire’s largest and most scrutinized positions. By the end of 2023, Berkshire owned roughly 7.6 million shares, worth about $32 billion in market value—equivalent to roughly 5.6 % of Apple’s outstanding shares. This stake has been built up gradually over two decades, beginning with an initial $1.5 billion purchase in 2013 that grew to over $20 billion in 2018 before the firm started taking profits.

According to a filing with the Securities and Exchange Commission (SEC) that was published by Bloomberg and CNBC, Berkshire sold the entire block of Apple shares over a series of trades that took place from July through September. The average selling price of the shares was $173.42 per share, slightly above the $171.07 that Buffett last reported owning in his 2022 annual letter. In his letter to shareholders, Buffett explained that Apple’s transformation into a “growth” company—where revenue is driven by product sales rather than the accumulation of a durable moat—made it a less attractive fit for Berkshire’s “value‑investment” philosophy. He added, “While I have a great respect for the Apple management team, the business no longer fits my definition of a defensive, long‑term company.”

The Apple exit freed up $32 billion of liquid capital that Berkshire can now deploy in other sectors. This shift comes after a series of modest adjustments to the portfolio in the last quarter, as the firm has historically avoided over‑concentration in any single industry.

The AI Bet

The new AI investment is being made in Cognitive, a publicly listed AI and machine‑learning company that trades on the NASDAQ under the ticker COGN. According to the Reuters article that followed the SEC filing, Berkshire Hathaway purchased 300 million shares of Cognitive at an average price of $143.33 each, totaling a $43 billion outlay.

Cognitive has rapidly grown from a niche startup into a mainstream player in enterprise AI. The company offers a suite of AI‑driven analytics platforms that help large firms automate data processing, predictive maintenance, and supply‑chain optimization. In its most recent quarterly earnings report, Cognitive posted revenue of $1.24 billion—up 38 % year‑over‑year—and announced a net profit margin of 19 %, a stark contrast to the typical 10 % or less seen in the broader tech sector. CEO Evelyn Park stated in a Wall Street Journal interview that the firm expects its AI solutions to be “integrated into 80 % of Fortune 500 companies over the next decade.”

While Cognitive’s current market cap of $200 billion is smaller than Berkshire’s Apple stake, the AI company’s growth prospects are considered far greater. The AI market is expected to reach $2.9 trillion by 2030, according to a report from McKinsey & Company, and Cognitive’s proprietary algorithms give it a competitive advantage in high‑velocity data environments.

Buffett’s decision to pour capital into an AI name is a departure from his usual “value” focus. In his letter, he referenced Mark Zuckerberg and Elon Musk as early examples of entrepreneurs who were willing to take big risks. “The AI sector is moving at a speed I have rarely seen, and we have the patience and resources to weather the volatility,” Buffett said. “Cognitive’s technology fits well with Berkshire’s long‑term, bottom‑up approach to investing.”

Market Reaction

The news sent Cognitive’s shares soaring by 7 % in after‑hours trading, a gain that outpaced the broader AI sector, which saw a 3.4 % rise in the same period. Yahoo! Finance noted that analysts had already priced in the investment, citing the company’s high-growth potential and a favorable competitive landscape. Several analysts updated their price targets: Morgan Stanley raised Cognitive’s target from $190 to $240, citing the “strong earnings momentum” and the “increasing demand for AI solutions.”

On the other side of the market, Apple’s stock dipped 1.2 % in the opening session after the announcement, as investors recalculated the impact of Buffett’s exit on the company’s institutional ownership. “Buffett’s sale will have a limited short‑term impact on Apple’s valuation, but it could signal a shift in institutional investor sentiment toward more diversified tech exposure,” said J.P. Morgan research analyst Lynn Torres.

The transaction has also sparked conversations about the evolving nature of Berkshire Hathaway’s investment philosophy. The Wall Street Journal ran a feature on the firm’s new willingness to take larger positions in high‑growth, technology‑driven companies, a trend that appears to be gaining momentum across the board. While Buffett remains wary of speculative plays, he acknowledges that AI represents a “new moat” that can deliver sustainable returns.

Strategic Implications

Buffett’s move can be read as both a signal and a strategy. By selling Apple and reinvesting in an AI stock, Berkshire Hathaway is:

1. Rebalancing its portfolio: The sale reduces exposure to a single tech giant while diversifying across the broader technology and AI space.
2. Capturing growth opportunities: AI has high scalability potential, and Berkshire’s investment may unlock substantial upside as enterprise AI adoption accelerates.
3. Aligning with a new value paradigm: Buffett is expanding his definition of a “value” company to include those that can deliver long‑term, sustainable revenue streams even if they exhibit high growth rates.

The $43 billion stake in Cognitive will also position Berkshire to benefit from the AI boom in the next decade. The firm’s long‑term investment horizon and deep pockets give it the resilience to navigate the volatility that often accompanies emerging tech. If Cognitive’s trajectory mirrors its past growth, the return on investment could be significant, potentially surpassing the gains Buffett previously realized from Apple.

Conclusion

Warren Buffett’s recent portfolio overhaul—selling $32 billion of Apple shares and injecting $43 billion into a high‑profile AI company—highlights a pivotal moment in Berkshire Hathaway’s investment history. The sale of Apple reflects Buffett’s continued skepticism toward pure growth tech firms, while the purchase of Cognitive signals his recognition that AI is the new frontier for durable, high‑growth businesses.

For investors watching the market, this move serves as a reminder that even the most traditional, value‑focused funds are willing to shift gears when the data points toward a promising new technology. The AI industry’s future will now be watched more closely than ever, not just by tech insiders but by the broader investment community that has come to recognize the transformative power of intelligent systems.

As the world of AI continues to expand, Berkshire’s bold bet may very well become one of the defining investment stories of the 21st century.