After Warren Buffett exit, Greg Abel starts deploying Berkshire Hathaway’s $365.5 billion cash pile
Berkshire Hathaway’s enormous cash reserve is beginning to decline under new CEO Greg Abel, signaling a potentially important shift in the investment strategy of the
Berkshire Hathaway’s enormous cash reserve is beginning to decline under new CEO Greg Abel, signaling a potentially important shift in the investment strategy of the conglomerate once led by Warren Buffett. Berkshire reported on Saturday that it held $365.5 billion in cash and Treasury bills at the end of June, down considerably from $397.4 billion at the end of March. Excluding Treasury payables, the company’s cash and short-term government securities declined from roughly $380 billion to $365 billion during the quarter. Abel, who formally succeeded Buffett as Berkshire’s chief executive at the beginning of this year, has overseen a renewed deployment of the company’s huge financial reserves. During the April-to-June quarter, Berkshire repurchased approximately $4.5 billion of its own shares. It continued that pace in July, buying back more than $3.3 billion in additional stock.
The company had resumed share repurchases in March following an almost two-year pause. Berkshire also made a major shift in its broader investment activity. The company purchased nearly $20 billion more in stocks than it sold during the quarter, ending a streak of 14 consecutive quarters in which it had been a net seller of equities. Among the notable purchases was an additional $10 billion investment in Alphabet, the parent company of Google and YouTube. The purchase has made Alphabet one of Berkshire’s largest equity holdings, alongside major positions in companies such as Apple, Coca-Cola, American Express and Bank of America. Berkshire’s operating performance was also stronger than expected. Quarterly operating profit increased 16% to $12.98 billion, exceeding analysts’ forecasts. Improved results at BNSF, the company’s railroad operation, and service businesses such as NetJets and TTI helped counter weaker performance at Geico, Berkshire’s auto insurance unit.
Net income surged to $25.6 billion, more than twice the $12.3 billion reported during the same period a year earlier. Revenue also improved, rising 10% to $101.81 billion after a period of stagnation. The company said much of its reduced cash balance reflected money deployed into stock purchases and share buybacks. Berkshire had not been a net buyer of equities since 2022, making the latest shift particularly significant for investors watching Abel’s approach. At the same time, Berkshire warned shareholders that substantial uncertainty remains surrounding the global economic and geopolitical environment. The company pointed to factors including tariffs and wars, while also highlighting weaker demand across several consumer-facing businesses. Berkshire said changing consumer confidence was affecting operations including its network of 103 car and truck dealerships, Fruit of the Loom apparel business and Forest River recreational vehicle operations.
The BriefWire