Warren Buffett’s Exit: How It Could Shake Up Apple Shares in the Short and Long Run!
Warren Buffett, often referred to as the “Oracle of Omaha,” is one of the most influential investors in the world. His investment decisions, particularly through Berkshire Hathaway, have a significant impact on the market, and his substantial stake in Apple Inc. (NASDAQ: AAPL) is closely watched by investors.
As Buffett approaches his 95th birthday in August 2025, speculation about his eventual stepping down as CEO of Berkshire Hathaway raises questions about its potential effect on Apple’s share price.
This article explores the possible short-term and long-term impacts of Buffett stepping down on Apple’s stock, drawing on historical examples and current market dynamics.
Short-Term possible Effects: Market Reaction and Volatility
In the short term, the announcement of Warren Buffett stepping down as CEO of Berkshire Hathaway would likely lead to a sharp, sentiment-driven reaction in Apple’s stock price. Buffett’s reputation as a value investor with an unparalleled track record makes his moves a signal for many investors. Berkshire Hathaway’s significant ownership of Apple—approximately 300 million shares valued at $69.9 billion as of September 2024, despite substantial sell-offs—means any perceived shift in Berkshire’s strategy could trigger volatility.
Market Sentiment and Knee-Jerk Reactions:
The immediate reaction to Buffett stepping down could be a sell-off in Apple shares, driven by uncertainty about Berkshire’s future investment strategy under new leadership, likely Vice Chairman Greg Abel. Investors may fear that Abel might further reduce or exit Berkshire’s Apple position, especially given Buffett’s recent sales of over 600 million Apple shares in 2024, which already sparked market concerns. For example, when Buffett sold nearly half of Berkshire’s Apple stake in Q2 2024, Apple’s stock fell 7% in overnight trading, erasing $240 billion in market capitalization. This suggests that news of Buffett’s departure could amplify such a reaction, particularly if markets interpret it as a lack of confidence in Apple’s future.
Historical Example: Steve Jobs’ Resignation from Apple (2011):
A relevant historical parallel is the resignation of Steve Jobs as Apple’s CEO in August 2011 due to health concerns. Apple’s stock dropped approximately 5% in after-hours trading immediately following the announcement, reflecting investor fears about the company’s future without its visionary leader. However, the stock recovered within weeks as confidence in Tim Cook’s leadership grew. Similarly, Buffett’s departure could cause a temporary dip in Apple’s stock, but the extent and duration would depend on the market’s perception of Abel’s ability to maintain Berkshire’s investment philosophy and Apple’s underlying fundamentals.
Buffett’s Influence on Market Perception:
Buffett’s public praise of Apple, calling it “an even better business” than American Express or Coca-Cola, has historically bolstered investor confidence. His departure might lead to speculation that Berkshire’s reduced stake in Apple—down from 900 million shares at the start of 2024 to 300 million by Q3 2024—signals deeper concerns about Apple’s valuation or growth prospects, especially given its high price-to-earnings (P/E) ratio of 38 in November 2024. This could exacerbate short-term downward pressure on Apple’s stock price.
Long-Term possible Effects: Fundamentals Over Sentiment
While the short-term impact of Buffett stepping down could be significant, the long-term effect on Apple’s share price is likely to be more muted, driven primarily by the company’s fundamentals rather than Berkshire’s ownership changes. Apple’s stock performance over the long term will depend on its ability to innovate, maintain profitability, and navigate macroeconomic and geopolitical challenges, rather than Buffett’s presence at Berkshire.
Apple’s Strong Fundamentals:
Apple remains a cash-generating powerhouse, with approximately $100 billion in annual free cash flow and a robust services segment that contributed 22.2% of revenue and 35.7% of gross profit in fiscal 2023. Despite challenges like declining iPhone sales in China and regulatory scrutiny, Apple’s brand loyalty, ecosystem strength, and ongoing investments in artificial intelligence (e.g., Apple Intelligence) position it for long-term growth. These factors suggest that Apple’s stock price would likely stabilize and grow over time, regardless of Buffett’s involvement, as long as the company executes effectively.
Berkshire’s Continued Influence Under New Leadership:
Greg Abel, Buffett’s designated successor, has been deeply involved in Berkshire’s operations and is expected to maintain its value-oriented investment philosophy. While Abel may adjust Berkshire’s portfolio, there’s no indication he would abruptly divest Apple, especially given its status as Berkshire’s largest equity holding, even after significant sales. The gradual reduction in Berkshire’s Apple stake in 2024 suggests a strategic rebalancing rather than a lack of confidence in Apple, and Abel is likely to continue this approach. Over the long term, Apple’s stock price would be less affected by Berkshire’s ownership percentage and more by market perceptions of its growth trajectory.
Historical Example: Buffett’s Reduced Stakes in Other Companies:
A historical example of Buffett reducing stakes without long-term detriment to the stock is his gradual sell-off of IBM shares between 2016 and 2018. Berkshire sold its entire IBM position, citing concerns about the company’s competitive position, but IBM’s stock price did not suffer sustained declines solely due to Buffett’s exit. Instead, its performance was driven by its business results and market conditions. Similarly, Apple’s long-term share price would likely reflect its operational performance rather than Buffett’s departure or Berkshire’s reduced stake.
Macro and Geopolitical Considerations:
Apple’s long-term stock performance could be influenced by external factors, such as U.S.-China trade tensions and tariffs, which have already impacted its stock in 2025. For instance, Apple’s shares dropped 7.29% on April 4, 2025, amid tariff-related sell-offs, closing at $188.38—below the price at which Buffett began trimming his stake. These macroeconomic pressures are likely to have a greater long-term impact on Apple’s stock than Buffett’s stepping down, as they directly affect Apple’s supply chain and profitability.
Historical Context: Buffett’s Influence and Succession Planning
Buffett’s influence on markets is well-documented, but his careful succession planning at Berkshire suggests that his departure may not be as disruptive as feared. Since naming Greg Abel as his successor in 2021, Buffett has emphasized Abel’s alignment with Berkshire’s investment principles. Moreover, Berkshire’s diversified portfolio—spanning insurance, energy, and consumer goods—reduces its reliance on any single holding, including Apple. Historical examples of leadership transitions at major investment firms, such as Peter Lynch’s departure from Fidelity’s Magellan Fund in 1990, show that while short-term volatility is common, long-term performance depends on the successor’s competence and the underlying assets’ strength. Lynch’s exit led to a temporary dip in fund performance, but Magellan recovered under new management, illustrating that well-prepared transitions can mitigate long-term impacts.
Conclusion: Short-Term Dip, Long-Term Resilience
In summary, Warren Buffett stepping down as CEO of Berkshire Hathaway would likely cause a short-term decline in Apple’s share price, driven by market sentiment and uncertainty about Berkshire’s future strategy under Greg Abel. Historical parallels, such as Steve Jobs’ resignation and Buffett’s past sell-offs, suggest a temporary dip of 5-10%, potentially amplified by Buffett’s recent sales and Apple’s high valuation. However, in the long term, Apple’s stock price is likely to be driven by its fundamentals—cash flow, innovation, and market position—rather than Berkshire’s ownership. Macroeconomic factors like tariffs and competition will play a larger role than Buffett’s departure. Investors should focus on Apple’s operational performance and broader market trends rather than reacting solely to Buffett’s exit.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in securities involves risks, and individuals should conduct their own research or consult a qualified financial advisor before making investment decisions.
