Warren Buffett Is Dumping Apple and Bank of America Shares and Buying This Red-Hot AI Stock to End 2025

As Warren Buffett prepares to step down as CEO after 60 years, Berkshire Hathaway trimmed stakes in Apple and Bank of America—reducing Apple to just over 238 million shares (21.4% of its stock portfolio) and Bank of America to just over 568 million shares (9.6%)—and parked the proceeds into U.S. Treasury bills now totaling over $320 billion. For the first time Berkshire purchased about 17.8 million shares of Alphabet in Q3, drawn to its AI positioning, chip initiatives, strong cash flow (nearly $24.5 billion FCF in Q3), a record $102.3 billion revenue quarter, and roughly $98.5 billion in cash and equivalents, while Apple's high forward valuation (about 33.6x projected earnings) and long-held gains in Bank of America help explain the sales. The transactions reflect a strategic rebalancing toward liquidity and selective exposure to cash-generative AI leaders as Berkshire transitions management and updates its portfolio mix.

Analysis

Warren Buffett's announced year-end step-down coincides with a tactical portfolio reshuffle: Berkshire Hathaway trimmed Apple to just over 238 million shares (21.4% of its stock portfolio) and Bank of America to just over 568 million shares (9.6%), redeploying proceeds into U.S. Treasury bills that now exceed $320 billion, while initiating a position of roughly 17.8 million Alphabet shares in Q3. The Apple sale is framed by valuation concerns—Apple trades at about 33.6x projected next-12-month earnings—while the Bank of America reduction reads as profit-taking from a long-held, highly appreciated stake begun in 2011.

Alphabet's appeal in Berkshire's entry is supported by concrete company fundamentals: a record Q3 revenue of $102.3 billion (its first $100 billion quarter), nearly $24.5 billion in free cash flow for the quarter, and roughly $98.5 billion in cash and equivalents, plus strategic positioning in AI (Gemini, data centers, in-house chips) and a newly initiated dividend. These metrics align with Berkshire's historical preference for cash-generative franchises and help explain why a traditionally conservative investor opened a tech position now.

The move signals a dual strategy of de-risking via liquidity accumulation and selective exposure to AI-enabled, cash-flow-rich technology. Key near-term risks for investors include leadership transition uncertainty at Berkshire, potential opportunity cost from reducing concentration in Apple if the stock re-rates, and the impact of large Treasury holdings on Berkshire's return profile versus equities.

Key Decisions for Investors

• Consider selectively increasing exposure to Alphabet or other cash-flow-positive AI leaders, given Alphabet's $102.3 billion Q3 revenue, nearly $24.5 billion in Q3 free cash flow, and Berkshire's new position
• Re-evaluate outsized Apple positions and consider trimming or rebalancing if your allocation does not reflect the 33.6x forward earnings valuation that partly motivated Berkshire's reduction
• Monitor Berkshire's leadership transition, its $320+ billion Treasury allocation, and subsequent Q4 portfolio activity as potential market catalysts before making large reallocation decisions