Warren Buffett Dumped Nearly 70% Of Apple Shares, But Its Price-To-Sales Ratio Remains Elevated At 8.2x, Warns This Market Analyst

Apple Inc. AAPL continues to trade at elevated valuation levels despite Warren Buffett‘s Berkshire Hathaway Inc. significantly reducing its stake in the iPhone maker, according to a prominent market analyst.

What Happened: Lawrence McDonald, founder of Bear Traps Report, highlighted concerns about Apple’s current price-to-sales ratio in a post on X on Sunday.

“Think about your 401k and Apple, its (S&P 500) Top holding — From 2005 to 2020, Apple traded between a 2 and 5 handle price to sales. On Christmas Eve, she peaked at 10.2x sales and now sits—After Buffett dumped nearly 70% of his shares—at 8.2x,” McDonald wrote.

The price-to-sales ratio measures a company’s market cap relative to revenue, showing how much investors pay per dollar of sales. Apple’s current 8.2x P/S far exceeds its historical 2-5x range, a premium it began surpassing after June 2020, according to CompaniesMarketCap

McDonald warned that the growing influence of passive index funds is damaging the market’s ability to price stocks efficiently, with Apple being a prime example.

Think about your 401k and Apple, its (S&P 500) TOP holding — From 2005 to 2020, $AAPL traded between a 2 and 5 handle price to sales. On Christmas Eve, she peaked at 10.2x sales and now sits—AFTER Buffett dumped nearly 70% of his shares—at 8.2x. The larger passive index funds… https://t.co/d2hVBNsWlr pic.twitter.com/uY7Syrgudj
— Lawrence McDonald (@Convertbond) March 16, 2025

Why It Matters: The comments come after Buffett’s dramatic reduction in Berkshire’s Apple holdings over the past year. Berkshire held 905.6 million Apple shares valued at approximately $174 billion at the start of 2024 but sold 116.2 million shares in the first quarter and an additional 389.7 million in the second quarter.

By the end of the third quarter, Buffett had further reduced the position to around 300 million shares.

The valuation concerns and China sales troubles have impacted Apple’s stock performance. While AAPL gained 14.8% over the past year, it significantly underperformed the S&P 500’s 25.6% rise during the same period.

A recent investor poll by Benzinga showed opinion nearly evenly split on Buffett’s next move, with 56% believing he will maintain his remaining Apple position for the long term, while 44% expect further reductions soon.

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