It’s well known that Warren Buffett has never been an avid investor in the tech sector, citing that if he couldn’t understand something, then he wouldn’t touch it. However, the oracle of Omaha wound up investing in some of the top names in the industry, reporting back in September it had 41.4 million shares invested in computing giant Oracle (NYSE: ORCL). However, Berkshire Hathaway (NYSE: BRK.A) revealed that the firm ended up dumping all of its shares in the tech giant, with stock prices dropping as a result.
The last quarter of 2018 has seen increased volatility from many stocks as markets reacted to worries over escalating US-China trade talks. When coupled with the fact that Berkshire revealed it had over $100 billion in cash sitting in their bank accounts, many expected the company to make a number of investment moves over the quarter. However, it turns out that they did relatively little. Most notably was their decision to drop all 41.4 million shares of Oracle, according to CNBC.
Additionally, Berkshire also cut its stake in other tech giants, such as Apple (NASDAQ: AAPL). Wells Fargo (NYSE: WFC) and a couple of other airlines. Instead, the company increased its ownership of General Motors (NYSE: GM), along with Bank of America (NYSE: MER-K) and JPMorgan Chase (NYSE: JPM) as being the top purchases this quarter, buying 19.8 million, 18.9 million, and 14.5 million shares of each respectively.
It’s unclear why Buffet made a move to liquidate its position in Oracle, as most investors would mention that such quick trades are uncharacteristic for the value investor. Some instead are disappointed that Berkshire didn’t invest more of it’s 100 billion into the markets and put the money to work rather than just sitting in their bank accounts.
Shares of Oracle have dropped around 2 percent in after-hours trading, with many expecting a further drop once the markets open on Friday morning. It seems unlikely that this development will halt what has been a slow but steady 1-month uptrend for the company’s stock price. The companies also went up around 4 percent in the last year, with the stock rising in December after announcing better-than-expected Q2 earning results.
Oracle Company Profile
Oracle Corporation (Oracle), incorporated on October 9, 2005, provides products and services that address all aspects of corporate information technology (IT) environments, including application, platform and infrastructure. The Company’s businesses include cloud and on-premise software, hardware and services.
Its cloud and on-premise software business consists of three segments, including cloud software and on-premise software, which includes Software as a Service (SaaS) and Platform as a Service (PaaS) offerings, cloud infrastructure as a service (IaaS) and software license updates and product support. Its hardware business consists of two segments, including hardware products and hardware support. Its services business includes activities, such as consulting services, enhanced support services and education services, among others. – Reuters
Berkshire Hathaway Company Profile
Berkshire Hathaway Inc., through its subsidiaries engages in insurance, freight rail transportation, and utility businesses. It provides property and casualty insurance and reinsurance, as well as life, accident, and health reinsurance; and operates railroad systems in North America. – Bloomberg