Buffett’s Berkshire Sells Apple Shares Ahead of Potential Corporate Tax Hike under Biden Administration

In response to the potential increase in corporate taxes proposed by President Biden, Warren Buffett’s Berkshire Hathaway has begun selling some of its large stake in Apple, which previously accounted for over half of its investment portfolio. Buffett acknowledged that while Berkshire does not object to paying taxes, it recognizes the trend and anticipates rates remaining or potentially increasing. This move allows Berkshire to capture some of the gains before being forced to pay higher taxes if the corporate income tax rate rises from the current 21% to Biden’s proposed 28%. While Buffett remains confident in Apple’s long-term prospects, some experts caution against investing in the company due to its declining core business, particularly iPhone sales and revenue. Additionally, despite reporting improved gross profit and profitability, Apple’s stock continues to trade at a premium valuation of 28 times forward earnings, compared to the S&P 500’s lower valuation of 21 times forward earnings. Investors considering purchasing Apple stock should carefully weigh these factors. The Motley Fool’s Stock Advisor service offers detailed analysis and guidance for building a portfolio and making informed investment decisions, providing two new stock recommendations each month. Past performance indicates that following these recommendations can yield significant returns, such as Nvidia’s 543,758% gain for investors who followed the service’s recommendation in 2005. The Motley Fool discloses its positions in Apple and Berkshire Hathaway.