Berkshire’s Quiet Pivot: $4.5 Billion Buyback Breaks a 14-Quarter Freeze
Berkshire Hathaway just gave long-term investors the clearest signal yet that its capital-allocation drought is over. In its first full quarter under new CEO Greg Abel, the conglomerate repurchased roughly $4.5 billion of its own stock — a sharp jump from just $235 million in the first quarter — and became a net buyer of equities for the first time in 14 consecutive quarters, adding nearly $20 billion in net stock purchases. For a company that had been quietly hoarding cash while Warren Buffett said he couldn’t find value, that reversal matters more than the headline earnings print.
The underlying businesses did their part too. Operating earnings — the metric Buffett and Abel have long called the truer read on Berkshire’s health — rose 16% to $12.98 billion from $11.16 billion a year earlier. Manufacturing, service and retailing earnings jumped 24% to $4.47 billion, Berkshire Hathaway Energy’s profit surged 27% to $891 million, and BNSF’s railroad income climbed 6% to $1.56 billion. Insurance was the soft spot, with underwriting income down 13% to $1.73 billion and investment income off 9% to $3.06 billion — a reminder that even Berkshire’s steadiest moat has cyclical dents.
Berkshire’s fabled cash pile, which peaked near $397 billion last quarter, fell to about $365.5 billion as Abel funded buybacks, the $8.5 billion Taylor Morrison acquisition, and fresh equity stakes. Alphabet has now climbed into Berkshire’s top five holdings by market value, joining long-standing anchors American Express, Apple, Bank of America and Coca-Cola — a notable shift for a portfolio that avoided Big Tech for decades.
Berkshire shares are up just 3% this year, trailing the S&P 500’s 13% gain, even after a 9% rally over the past three months. That gap is the real story: a company sitting on diversified, cash-generating businesses and a newly aggressive buyback program is being priced like it’s standing still. So what for long-term investors — Berkshire’s discount to the broader market, paired with a management team finally willing to deploy capital rather than just stockpile it, is exactly the kind of quiet mismatch patient shareholders have historically been rewarded for holding through.
