Berkshire Stock Recovers Its Buffett-Exit Slump, Hits Records

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Berkshire Hathaway shares have now erased every point they lost after Warren Buffett announced at the 2025 shareholders meeting that he would step down as CEO at the end of that year. The recovery took almost 18 months. Both share classes topped their pre-announcement levels on Tuesday, and on Thursday they set new closing highs of $820,500 for the A shares and $546.97 for the B shares. Both slipped almost 1% on Friday but remain about half a percentage point above their levels just before the 2025 meeting.

How far they fell

On Friday, May 2, 2025, the A shares closed at $809,350 and the B shares at $539.80. The meeting was the next day. On Monday, May 5, the A shares dropped 4.9% and the B shares lost 5.1%. A 14% drop in first-quarter operating earnings, announced the same Saturday, may have contributed to the declines. Analysts such as Brian Meredith at UBS predicted that the company's culture and strategy would "remain unchanged" under new CEO Greg Abel, but investors were apparently not reassured, and there were fears that a "Buffett premium" was evaporating.

At their lowest closes three months later, the A shares had lost 14.3% of their value and the B shares almost 15%. Since then they have rallied by 18%.

Most of the gain since the August 2025 low came this month. The B shares are up almost 9% since the start of October, against a 0.4% dip for the S&P 500 and a 4.8% drop for the equal-weight NYSE Fang+ index of 10 megacap tech names. Berkshire's year-to-date shortfall against the S&P is now less than four percentage points.

Investors have been rotating out of tech and AI stocks in recent weeks, amid concern that massive spending on computing infrastructure will not produce the profits they envision. A Barron's headline this week called Berkshire "the ultimate anti-AI play." The company holds more than $350 billion in cash and equivalents and earns close to $50 billion a year after tax.

Adam Patti of VistaShares, which runs an ETF that tracks Berkshire's portfolio, said Monday that "the market spent a year pricing Berkshire without Buffett. I think it's finally decided Abel can, in fact, run it." He said the market's turn away from a momentum-driven frenzy comes at a good time, and that he likes that Abel is putting the company's cash to use.

Berkshire is not entirely apart from the AI world. Abel has said that supplying energy to the growing number of AI data centers is a "significant opportunity for Berkshire and Berkshire Hathaway Energy," as long as rates do not rise for its other customers. Berkshire also holds a position in Alphabet now worth $34 billion.

Source: CNBC