Apple soared, while Berkshire Hathaway lagged behind
Apple's stock price hits a new high, surpassing Microsoft and Nvidia, becoming the world's largest company by market value. However, Berkshire Hathaway, which holds a significant amount of Apple shares, has only seen a cumulative increase of about 12.59% this year, trailing behind the S&P 500 index for the same period
Apple's stock price has hit a new high again.
On Tuesday, Apple's stock price continued to rise by 0.38%, reaching a new high of $229 at one point during the trading session, closing at $228.6. The market value reached $3.5 trillion, surpassing Microsoft and Nvidia once again, becoming the world's largest company by market capitalization.
As Apple's stock price continues to rise, Warren Buffett's Berkshire Hathaway's stock investment portfolio also surpassed $400 billion. Apple accounts for about 44% of Berkshire Hathaway's investment portfolio.
While the value of Berkshire Hathaway's stock investment portfolio continues to rise, its own stock price performance has been mediocre. Berkshire Hathaway's Class A shares rose by 0.7% on Tuesday, closing at $618,400, with a year-to-date increase of about 12.59%. Not only did it significantly underperform Apple, but it also lagged behind the S&P 500's 17.5% increase during the same period.
Optimistic investors in Berkshire Hathaway have found an opportunity: the stock price performance of Berkshire Hathaway lags behind its investment portfolio and valuation.
According to the analysis by some media, based on Berkshire Hathaway's Class A shares' book value of $425,000 per share as of June 30, the current price-to-book ratio is about 1.45, consistent with the five-year average level. However, back in February this year, Berkshire Hathaway's stock price approached $650,000, reaching its peak, and the price-to-book ratio once exceeded 1.6 times. This means that the current valuation of Berkshire Hathaway's stock may be relatively reasonable, closer to its historical average level. Berkshire Hathaway's stock investment portfolio currently accounts for 45% of its $890 billion market value, with an estimated PE ratio of 21 by 2024, which would result in a relatively lower valuation based on this calculation.
Although Buffett reduced his Apple holdings by over 10% in the first quarter, Apple remains a key driver of Berkshire Hathaway's investment portfolio, along with significant holdings in American banks and American Express, helping Berkshire Hathaway steadily move forward