" The hottest megacap stock lately has been Berkshire Hathaway
BRK.B

-0.87%

, which hit a record high this past week after rising almost 8% in the past month.

Berkshire is probably the ultimate defensive stock, given its diversified earnings power and fortress balance sheet, with over $350 billion in cash, or 30% of its current market value of $1.2 trillion.

So it isn’t surprising that Berkshire has rallied as investors rotate out of technology and other artificial-intelligence plays into defensive groups like consumer stocks, real estate, and utilities.

Barron’s has been bullish on Berkshire, but the stock doesn’t look like a bargain now. The A shares traded Friday at $820,000 after overtaking the old high of about $810,000 set just before the May 2025 annual meeting. The B shares traded at $547. The stock is up 9% this year, still behind the S&P 500
SPX

-0.52%

’s 12% gain.



Berkshire trades for about 1.5 times our estimate of third-quarter book value—the company will probably report results on Nov. 7—and 24 times projected 2026 operating earnings.

Those aren’t excessive, but higher than the average of the past year. What about intrinsic value, Warren Buffett’s favorite metric? The stock now trades above UBS analyst Brian Meredith’s intrinsic value estimate of $815,000 per A share—one of the higher estimates on Wall Street.

A key issue for Berkshire is its cash deployment. Stock buybacks accelerated in July to over $3 billion, but shares were almost 10% lower then.



Are the buybacks continuing now, given a higher price? And will CEO Greg Abel find plays to invest in? One potential area is the AI space, where capital needs are massive. Berkshire invested $10 billion as part of Alphabet’s
GOOGL

-1.24%

$85 billion equity capital raise in June, boosting its stake to about $30 billion. Meta Platforms
META

-0.96%

could come to market with a big equity deal by year end, and Berkshire might participate."'


ucmtsu,no way. :)