The market value of Berkshire Hathaway Inc. (BRK.B-N) surpassed US$1-trillion on Wednesday, reflecting investor confidence in the conglomerate that Warren Buffett built over nearly six decades into what many consider a proxy for the American economy.
Berkshire joined six other U.S. companies, all in or tied with the technology sector, above US$1-trillion: Apple, Nvidia, Microsoft, Google parent Alphabet, Amazon.com and Facebook parent Meta Platforms.
In Wednesday trading, Berkshire’s class A shares rose as much as 1.2 per cent to just below US$700,000. The more plentiful class B shares trade for about one-1,500th as much.
Mr. Buffett, who turns 94 on Friday, has run Omaha, Neb.-based Berkshire since 1965.
He transformed it from a failing textile company into a colossus with dozens of old-economy businesses such as Geico car insurance, the BNSF railway, Berkshire Hathaway Energy, Brooks running shoes, Dairy Queen ice cream, Ginsu knives and the World Book encyclopedia.
The operating businesses generated US$22.8-billion of profit in the year’s first half, up 26 per cent from 2023.
Berkshire also has a huge stock portfolio even after selling tens of billions of dollars of Apple and Bank of America, its largest and until recently its second-largest stock holdings, in 2024.
The sales are a major reason Berkshire’s cash hoard, mainly in U.S. Treasury bills, soared to US$276.9-billion as of June 30.
“Buffett built Berkshire in a systematic, relatively low risk manner,” said Steve Check, president of Check Capital Management in Costa Mesa, Calif., which invests one-third of its US$2-billion of assets in Berkshire stock and options. “As a huge conglomerate it will always have parts doing well.”
The US$1-trillion valuation is based on Berkshire’s 553,234 class A and 1,325,192,508 class B shares outstanding as of July 23. Berkshire has slowed its stock repurchases this year.
When the market value hit US$1-trillion, Berkshire shares had gained more than 5,600,000 per cent since the year Mr. Buffett took over.
That’s about 20 per cent annually, nearly double the annualized gain in the Standard & Poor’s 500 including dividends.
Through Tuesday, Berkshire was up 27 per cent this year, while the S&P 500 excluding dividends was up 18 per cent.
Mr. Buffett still owns more than 14 per cent of Berkshire despite having donated more than half his shares to charity since 2006.
As of Tuesday his fortune was about US$144.9-billion, making him the world’s sixth-richest person, Forbes magazine said.
Mr. Check said he became a grandfather on Aug. 16, and bought 100 Berkshire class B shares for his grandson Zealand that day.
“Investors should certainly not jump in because the market cap hit US$1-trillion, and the stock is perhaps as fully priced as it has been since before the 2008 financial crisis,” he said. “It is a good investment for someone with a 10-year horizon.”
The market value of Berkshire Hathaway surpassed US$1-Trillion on Wednesday, reflecting investor confidence in the conglomerate that "Oracle of Omaha" Warren Buffett built over nearly six decades into what many consider a proxy for the American economy.
Reuters
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