Berkshire Hathaway (BRK.B) on Solana

A $10,000 investment in Berkshire Hathaway (BRK.B) made in August 2016 would have grown to roughly $33,900 by August 2026, a compound annual growth rate of about 13% and nearly a tripling of capital. Over the same period, operating earnings expanded from $17.6 billion to $44.5 billion — approximately 2.5 times growth — while the insurance float nearly doubled to $177.5 billion. Buybacks reduced the share count by around 13%, amplifying per-share gains further and pushing the company's market capitalization to roughly $1.1 trillion.

Despite those results, Berkshire lagged the broader market over the decade. A comparable $10,000 in the SPDR S&P 500 ETF (SPY), with dividends reinvested, would have reached approximately $41,300 — a 15% annual return versus Berkshire's 13%, a gap of about $7,400 on the same starting amount. The stock currently trades at around 21 times operating earnings. The comparison underscores the persistent challenge facing even the most disciplined large-cap value investors: at scale, outperforming a low-cost index requires either unusual capital deployment opportunities or market conditions that favor concentration over diversification.

Alphabet has crossed a symbolic threshold inside Berkshire Hathaway's equity portfolio, with its market value edging past the firm's legendary Coca-Cola stake by roughly $16 million as of August 25. Greg Abel authorized $17 billion in Alphabet purchases during Q2 2026, including a $10 billion private placement, bringing total Alphabet exposure to third place in the portfolio. The investment thesis centers on what analysts describe as a virtual monopoly: Google has held between 89% and 93% of global search traffic for the past decade, and YouTube ranks as the second-most-visited site on the internet, giving Alphabet a durable advertising moat that fits Berkshire's longstanding preference for businesses with pricing power and compounding cash flows.

The positioning also reflects Alphabet's accelerating cloud revenue — its Google Cloud segment posted 82% year-over-year sales growth in Q2 2026, driven by AI integration. Where Warren Buffett's defining equity bet was Apple, analysts now frame Alphabet as the foundational technology holding Abel is building around: a business with structural dominance, high-margin cloud upside, and a cash generation profile that mirrors the durable economics Berkshire has always favored in legacy holdings like Coca-Cola and American Express.

Warren Buffett spent his final years as Berkshire CEO warning that stocks were dangerously overvalued — describing the market as behaving "like a casino" in a May CNBC interview — and acting on that view by selling equities for 13 consecutive quarters. By the time he stepped down at the end of 2025, Berkshire was sitting on $373.3 billion in cash, cash equivalents, and Treasury bills, a figure exceeding one-third of the company's market capitalization.

Greg Abel, who took over as CEO at the start of 2026, appears to see the same market differently. In Q2 2026, Berkshire became a net buyer of stocks for the first time since 2022, deploying capital into a range of positions led by a $17 billion acquisition of Alphabet shares, along with $1.64 billion in Delta Air Lines and smaller stakes in Lennar and Macy's. The shift signals a meaningful departure in investment temperament between the two leaders, with Abel willing to put Berkshire's substantial cash reserves to work in a market his predecessor explicitly avoided.

Berkshire Hathaway's B shares gained roughly 1.3% to $502 on Monday while the semiconductor sector broadly sold off — Nvidia fell 2%, AMD dropped 3%, Broadcom slid 2%, Intel fell 3%, and Micron declined 5% — even as the S&P 500 posted only modest losses. The divergence reflects Berkshire's near-total insulation from the AI infrastructure spending cycle: the company holds approximately $360 billion in cash and Treasury bills and carries no semiconductor positions in its equity portfolio, concentrating instead on consumer and financial franchises such as Apple, American Express, Coca-Cola, and Bank of America.

The move comes ahead of Nvidia's Wednesday earnings report, which has amplified broader nervousness about the pace of AI capital expenditure. Berkshire's defensive appeal is backed by solid fundamentals: Q2 operating earnings rose 16% year-over-year to $13 billion, with manufacturing and retail services up 24%, energy earnings climbing 27%, and railroad operations growing 6%. At $502, shares trade at roughly 21 times operating earnings — no longer a deep-discount valuation — but the company's cash stockpile grows more valuable precisely as risk assets come under pressure.

Greg Abel's first full quarter as Berkshire Hathaway CEO produced $23.5 billion in equity purchases spread across nine positions. The list spans U.S. growth tech, homebuilders, media, airlines, and Japanese trading houses — Alphabet, Macy's, Delta Air Lines, Lennar, D.R. Horton (a new position), the New York Times, Mitsubishi, Marubeni, and Sumitomo.

Alphabet drew the largest allocation, roughly $15–17 billion in total after a $10 billion private placement in June followed by an additional $5–7 billion through the quarter, making it Berkshire's third-largest equity holding. At 16.5 times forward earnings, Alphabet's valuation attracted Abel's capital alongside its Google Cloud unit, which reported a 35.6% operating margin — up from 20.7% a year earlier — with $514 billion in contracted revenue. Homebuilder bets on Lennar and new position D.R. Horton reflect a long-term thesis on U.S. housing demand, while expanded stakes in Mitsubishi, Marubeni, and Sumitomo underscore a multi-decade commitment to Japanese conglomerates trading at lower valuations than U.S. peers.

Greg Abel, in his first full quarter as Berkshire Hathaway CEO, more than doubled the conglomerate's position in Macy's during Q2 2026, building a stake now valued at roughly $173 million. The move is contrarian by Wall Street standards — most analysts rate Macy's a hold despite the stock's 78% gain over the past year — and it fits the classic Berkshire checklist: a recognizable brand, improving free cash flow (approximately $690 million estimated for FY2025), a 3.3% trailing dividend yield backed by $200 million in annual payouts, and $1.1 billion in remaining buyback authorization.

The bet tracks Macy's "A Bold New Chapter" strategy, which pairs store closures with a push into luxury retail and new technology platforms, and has driven comparable-sales growth to a four-year high. At 10.5x forward earnings, Abel appears to see unrecognized value that the broader market hasn't yet priced in — a signal that, as Buffett's successor, he is willing to apply familiar value principles to unloved corners of retail rather than pivot Berkshire toward growth-oriented names.

Occidental Petroleum, one of Berkshire Hathaway's major equity holdings, raised its dividend following strong sector performance and healthy cash generation, with the company reporting approximately $3 billion in free cash flow and notable progress on debt reduction. The dividend increase reflects improved capital allocation discipline at Occidental, supporting the sustainability of the higher payout through varying commodity price cycles.

The development provides a modest positive signal for Berkshire Hathaway shareholders, as the conglomerate's energy sector exposure through Occidental contributes to its broader income profile alongside its core insurance, freight rail, and utilities operations. Analysts note that the durability of Occidental's dividend will ultimately depend on future free cash flow results, making upcoming quarterly reports a key indicator to watch.

Greg Abel has expanded Berkshire Hathaway's Japanese equity exposure to approximately $43 billion, with the bulk concentrated in the five major sogo shosha trading houses — Mitsubishi, Mitsui, Itochu, Sumitomo, and Marubeni — and a 2.5% stake in Tokio Marine insurance acquired in March 2026. The positions were first accumulated by Warren Buffett beginning in summer 2019, but Abel has played an instrumental role in continuing to build them since assuming the CEO role at year-end 2025, making Japan one of the few areas where Berkshire has remained a net buyer as it sold equities in 14 of 15 recent quarters.

The Japan strategy reflects Berkshire's preference for companies trading at reasonable valuations relative to U.S. equities, which have reached historically elevated levels. The sogo shosha structures appeal to Abel on multiple fronts: they run diversified, multi-industry conglomerates with disciplined capital allocation, restrained executive pay compared to American peers, and shareholder-return programs anchored in dividends and buybacks — characteristics Buffett and Abel have long prioritized across Berkshire's equity portfolio.

Berkshire Hathaway added roughly 48 million Alphabet shares in Q2 2026, pushing its combined GOOGL/GOOG stake to approximately 106 million shares and elevating Alphabet to the firm's third-largest equity holding by value, behind only Apple and American Express. The move helped lift Berkshire's total equity portfolio to about $299 billion as of June 30, up from $263 billion at the end of Q1.

The purchases are among the clearest signals yet of Greg Abel's willingness to build large positions in technology during his first full year as CEO. Alongside the Alphabet buy, Berkshire added 17.5 million Delta Air Lines shares while trimming Bank of America by 30.2 million shares and exiting Constellation Brands entirely — a pattern that suggests Abel is rotating the portfolio toward selective tech concentration and away from broader financial-sector exposure inherited from the Buffett era.

Berkshire Hathaway's three-year total return of 42.6% has trailed the S&P 500's 73.6% over the same period, prompting comparisons with focused financial alternatives as investors assess the conglomerate's trajectory under new CEO Greg Abel. Writing for Yahoo Finance on August 12, analyst Stefon Walters argues that JPMorgan Chase — the largest American bank by assets and the world's most valuable bank — is better positioned for total returns, citing its dividend yield (currently 1.6%, with a five-year average of 2.4%) as a structural advantage Berkshire, which has never paid a dividend, cannot match.

JPMorgan shares have risen roughly 128% over the past five years as of the article's publication, a performance gap that the author says reflects a key trade-off: Berkshire's sprawling conglomerate structure and $1 trillion-plus valuation may constrain future upside relative to a focused financial company whose earnings power is directly tied to a single, well-understood business line. The comparison adds to a broader post-Buffett debate about whether Berkshire's diversification premium still justifies holding the stock over more concentrated financial sector plays.