In recent years, Apple (NASDAQ: AAPL) has stood as the dominant cornerstone of Warren Buffett’s investment portfolio. However, a notable shift has occurred with Buffett, often referred to as The Oracle of Omaha, reducing his significant stake in AAPL from roughly 50% to about 40%. This adjustment has resulted in potential unrealized losses exceeding $4 billion.
Concurrently, another entity appears to be emerging as a substantial player in Buffett’s portfolio by mid-June 2024: Occidental Petroleum (NYSE: OXY). Buffett’s confidence in Occidental dates back to 2022, when he initially capitalized on volatility in the oil market. Since then, his interest has steadily grown, culminating in a notable surge of acquisitions during a recent 9-day buying spree.
Buffett now commands nearly 29% of Occidental’s shares, amassing over 255 million shares. Despite his significant stake, he has asserted no intent to assume full control of the company. One pivotal factor bolstering Occidental’s appeal was its June 4 announcement of a partnership with Berkshire Hathaway (NYSE: BRK.A, BRK.B) focusing on lithium mining—a critical component in lithium-ion batteries essential for electric vehicles (EVs).
While Buffett’s backing has been robust, Occidental’s stock performance has been mixed in the first half of 2024. Despite a 2.01% year-to-date (YTD) gain, the stock failed to maintain a higher price achieved during a substantial rally from mid-February to early April. Presently trading around $61.26, it stands more than 11% below its yearly peak above $69, with recent trends indicating a downturn.
Nevertheless, market analysts remain optimistic about Occidental Petroleum’s future, reflecting an average ‘buy’ rating and a 12-month price target averaging $72.59 on TradingView. Even the most conservative projections anticipate a rise, with some forecasts suggesting a potential climb to $90 per share within a year.
The combination of bullish market predictions, coupled with Buffett’s strategic acquisitions amid Occidental’s lithium ventures, underscores the rationale behind his recent investment surge.
