WARREN BUFFETT WATCH

 
Berkshire shares shake the Buffett blues with new all-time highs

After almost 18 months, Berkshire Hathaway shares have entirely erased all the ground they lost in the wake of Warren Buffett's surprise announcement at the 2025 shareholders meeting that he would step down as CEO at the end of that year.

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People watch as Berkshire Hathaway chairman Warren Buffett is seen on CNBC's live coverage of the Berkshire Hathaway annual shareholders meeting in Omaha on May 3, 2025. (REUTERS/Brendan McDermid)

On Friday, May 2, 2025, the Class A shares closed at $809,350. The Class B shares finished at $539.80.

Both were record-high closes.

The meeting was the following day, Saturday, May 3.

On Monday, May 5, BRK.A dropped 4.9% and BRK.B lost 5.1%.

CNBC.com noted a 14% drop in Q1 operating earnings, also announced that Saturday, may have contributed to the declines.

It also relayed some reassurance from analysts like Brian Meredith at UBS who predicted the company's culture and strategy would "remain unchanged" under new CEO Greg Abel.

"Buffett leaves a company that is less reliant on his investing capabilities, with an array of leading businesses with strong cash flows."

Investors, however, were apparently not reassured.

As the stock fell, there were fears a "Buffett premium" was evaporating.

Three months later, at their lowest closes of the year, BRK.A had lost 14.3% of its value and the more widely held B shares were down almost 15%.

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Since then, they've rallied by 18%, and on Tuesday this week both classes topped their pre-announcement levels to set fresh all-time closing highs.

They were higher still on Thursday, setting new closing highs of $820,500 and $546.97.

Today they lost almost 1% but remain roughly one-half of a percentage point above their highs just before the 2025 meeting.

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Berkshire's gains have reduced its year-to-date deficit against the benchmark S&P to less than four percentage points.

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October sprint

A majority of the net gain in points between the August 2025 low and now has been racked up this month.

Berkshire's B shares have gained almost 9% since the start of October, strongly outperforming the S&P 500's dip of 0.4% and an almost 4.8% drop for the equal-weight NYSE Fang+ index, which tracks 10 megacap tech names, including Meta, NVIDIA, and Alphabet.

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Investors have been rotating out of high-flying tech and AI stocks in recent weeks amid growing concerns their massive spending on computing infrastructure won't produce the sustained profits they envision.

Berkshire, by contrast, is "the ultimate anti-AI play," according to a Barron's headline this week.

"With more than $350 billion in cash and equivalents on its balance sheet and close to $50 billion of annual after-tax earnings from a diverse group of businesses, Berkshire arguably is the most defensive megacap stock in the market."

And on CNBC's "Morning Call" Monday morning, Adam Patti of VistaShares, which runs an ETF that tracks Berkshire's portfolio, said the market's turn away from its long-running "momentum-driven frenzy" comes at a good time.

"The market spent a year pricing Berkshire without Buffett. I think it's finally decided Abel can, in fact, run it" and likes that he's taking advantage of the company's cash.

"Berkshire is a coiled spring. When it comes back, it comes back fast and furious."

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"MORNING CALL" VIDEO (OCT. 19): Top Berkshire watcher on why the market has finally realized Greg Abel can run the company

But, as Patti notes, Berkshire isn't completely separated from the AI world.

CEO Greg Abel has said providing energy to the growing number of AI data centers is a "significant opportunity for Berkshire and Berkshire Hathaway Energy" as long as rates don't rise for its other customers.

And Berkshire has a now $34 billion position in Alphabet, one of AI's biggest players.

 CNBC: Public 48077623