George Soros’ hedge fund, Soros Fund Management, recently exited its stake in tech giant Apple (AAPL), resulting in a 0.49% negative impact on its overall portfolio. This move aligns with other hedge fund managers who have also reduced their exposure to AAPL stock in the third quarter.
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It is worth highlighting that Warren Buffett’s Berkshire Hathaway cut its stake in Apple stock by 25% during the quarter. Also, Third Point Management trimmed its position in the stock to 930,000 shares from 1.95 million shares.
Potential Reasons for Hedge Funds Selling AAPL Stock
One of the reasons for hedge funds reducing stakes in Apple could be concerns over the stock’s valuation. AAPL’s price-to-earnings ratio of 37.01 and price-to-sales ratio of 8.83 are much above the sector’s median of 30.82 and 3.03, respectively.
Additionally, the smartphone market is becoming highly competitive, with companies like Samsung (GB:SMSN) and other Chinese manufacturers increasing their market share. This could have raised concerns among hedge funds about Apple’s future growth prospects.
Also, Apple is facing regulatory scrutiny in various markets, including antitrust investigations and data privacy concerns. These legal involvements could impact the company’s performance.
Soros Fund’s Other Notable Trades in Q3
In addition to selling AAPL stock, the hedge fund also sold shares of Alphabet (GOOGL), Super Micro Computer (SMCI), and Taiwan Semiconductor Manufacturing (TSM), among others.
Shifting focus to the buy side, the hedge fund bought 460,000 shares of Global Payments (GPN), worth $47.11 million. Soros Fund also increased its stake in Alibaba (BABA) and Financial Select Sector SPDR ETF (XLF).
Is AAPL Stock a Good Buy?
Despite the challenges mentioned, Apple remains a major player in the tech industry. Its strong brand loyalty and robust financial position enable it to navigate these headwinds and continue to deliver strong performance in the long term.
Turning to Wall Street, AAPL has a Moderate Buy consensus rating based on 24 Buys, eight Holds, and two Sells assigned in the last three months. At $245.35, the average Apple price target implies a 9.04% upside potential. Shares of the company have gained over 17% year-to-date.
