Buffett aggressively cuts Apple, Apple shareholders welcome unexpected good news in bad news: up to $40 billion "ammunition"

Over the weekend, news revealed that the stock god Warren Buffett unexpectedly sold a large amount of Apple stock in the second quarter, causing Apple's stock price and even the entire US stock market to experience a "Black Monday" in the following trading day.

However, in fact, Buffett's sale brought some unexpected good news to Apple investors: Apple's influence in major stock indices will be fully unleashed.

For years, Apple's weight in a series of benchmark indices has been low because Buffett's Berkshire Hathaway tends to hold its investments for the long term, making this part of the holdings non-tradable. Therefore, index providers calculate Apple's weight based on a method called market value of floating shares. As a result, Apple's true weight is not reflected in many indices.

In percentage terms, these numbers may not seem significant. For example, in the S&P 500 index, currently 94% of Apple's market value is considered. However, investment bank and institutional securities firm Piper Sandler believes this number should now rise to 100%. This difference is not insignificant for a company with a market value of $3 trillion.

According to Piper Sandler's estimate, passive funds tracking relevant indices may have to buy up to $40 billion worth of Apple stock at the next rebalancing after Berkshire sells its Apple holdings. This is three times the average daily trading volume of the company's stock in the past month.

Based on Piper Sandler's calculation, the entry of passive funds can fill a considerable proportion of Berkshire's exit. As of the end of the second quarter, Berkshire's Apple holdings were valued at $84.2 billion, and the second-quarter Apple holdings decreased from 789 million shares in the first quarter to about 400 million shares.

The mechanical influx of passive index funds into the market has been criticized by hedge fund Greenlight Capital's founder and president David Einhorn and other big players, who believe that passive investing fundamentally disrupts the market by making so much capital insensitive to value.

Some analysts believe that Buffett's halving of his Apple holdings indicates a lack of confidence in Apple's growth prospects, showing clear sensitivity to valuation.

Apple also received unfavorable news this week. A US court ruled that Google's search business violated US antitrust laws. To maintain its default search engine position, Google pays a hefty sum to Apple each year, and Google's defeat in this matter may affect about 17% of Apple's operating profit.

It is also worth noting that the rise in Apple's weight is bad news for some other companies in the index, as their weight will be reduced to accommodate this change, and their stocks will also face corresponding selling pressure from passive funds.

The first revision of Apple's weight will not take place until the next quarter's index rebalancing next month. Currently, the market is more focused on US economic growth and Federal Reserve monetary policy. Nevertheless, there is a group of traders betting on events like weight adjustments affecting stock prices. The Chief Investment Strategist at Piper Sandler stated, "We often see trading activity due to rebalancing. People want to understand this." A spokesperson for the S&P Dow Jones Indices declined to comment further on the related weight adjustments.

This week, Apple's stock price showed a trend of first suppression and then rise. Although the low point during the stock market crash on Monday fell more than 10% from last Friday's closing price, the closing drop narrowed significantly, closing down by 4.8% on the same day, with a cumulative decline of only 1.65% for the week