Berkshire Rally Tests Life After Buffett's Cash Hoard

Berkshire Hathaway closed Friday at $798,000 a share for Class A stock, just 1.4% shy of its all-time high. Class B shares ended at $532.02, also 1.4% below their record. It's the company's strongest showing since Warren Buffett told shareholders at the May 2025 annual meeting he planned to step down as CEO at the end of that year.

The road back had plenty of bumps. Both share classes closed at record highs the day before Buffett's announcement, then fell more than 14% over the next three months as investors worried that a "Buffett premium" was dissolving. Berkshire hit its post-meeting low in August 2025. A loss Thursday broke a 10-session winning streak that had added 5% to the share prices. The shares bounced back more than 1% Friday. Berkshire's market capitalization stands at $1,138,885,966,355.

A Giant Sitting on a Mountain of Cash

The rally points to a company accumulating far more money than it spends. Berkshire still held roughly $360 billion in cash, which the newsletter called "a good symbol of continued patience under the new CEO." The company reported $365.5 billion in cash as of June 30, down 8.0% from March 31. Excluding Rail Cash and subtracting T-Bills Payable, the total was $359.2 billion, down 3.8%.

Under CEO Greg Abel, Berkshire has begun putting some of that cash to work. It spent $4.5 billion on share buybacks in the second quarter of 2026 and invested in Alphabet, Taylor Morrison Home, Lennar and Bending Spoons. Barron's Andrew Bary wrote that "many Berkshire holders would like to see the company invest more heavily in stocks given the company's $350 billion-plus in cash."

Keefe, Bruyette & Woods analyst Meyer Shields said higher short-term interest rates could lift the shares because Berkshire would be "making more money" on its cash. Part of the appeal, then, is a huge cash pile earning more simply because rates are higher.

What's Driving the Gains

A few tailwinds have helped. Berkshire's insurance operations have benefited from a quiet hurricane season so far. Higher oil prices boosted its $19 billion stake in Chevron, whose shares closed Friday at an all-time high after gaining almost 36% since the start of July. Berkshire's energy-related subsidiaries also got a lift. Investors may also be rotating away from high-flying AI and technology stocks and toward "old" economy companies.

Coca-Cola, a long-time Buffett favorite and a $37.6 billion Berkshire holding, also closed Friday at an all-time high, up 34% year-to-date. Berkshire's position gained $2.4 billion in a week, passing Alphabet to become the portfolio's third-largest stake. The newsletter suggested KFC's switch from Pepsi to Coke may have helped.

A 2015 CNBC archive interview captures how Buffett described the holding as concern about sugary drinks grew. "I'm 84, literally one-quarter of all the calories I've consumed in the last 30 years have been Coca-Cola," he said. "And I don't see how anybody can feel any better than I feel." He added, "Some people will like other things, and if they like broccoli and Brussels sprouts, God bless them, you know, but don't invite me for dinner." He also acknowledged, "I don't know of any study that's been made on the lifetime of heavy users of Coca-Cola versus people who drink nothing but water."

The Bending Spoons Bet

Bending Spoons is the most surprising move. The Italian company began trading on Nasdaq in July. It buys internet companies, including AOL, Evernote and Vimeo, uses artificial intelligence to cut costs, then puts the savings toward acquisitions. It's no typical Berkshire value investment, and it trades at a large multiple of its earnings.

Before the U.S. market opened Wednesday, Bending Spoons announced Berkshire would invest a "further" $330 million, buying 10 million newly issued shares at $33 each in a private placement. That price was almost 12% below Tuesday's $37.86 close. Shares jumped 41% Wednesday, closing at $53.46, then ended Friday at $47.07 after a technology-stock sell-off. Berkshire's paper profit on the new shares stood at nearly $141 million.

The announcement also disclosed that Berkshire had invested $600 million in the company's IPO more than three months earlier. The release didn't say how many shares Berkshire bought in July. If the shares cost the $29 IPO price, the initial purchase would have been almost 20.7 million shares. That would put Berkshire's combined holding near 30.7 million shares, worth more than $1.4 billion and representing a 55.3% gain on a $930 million investment. Bending Spoons said the new investment brings Berkshire's ownership to 4%, though the newsletter's calculation puts the stake at 4.5%. No one knows who at Berkshire decided to make the investment.

Morningstar's Greggory Warren wrote that the deal and the Alphabet stake showed "the firm is finally moving out of its comfort zone to find places to put capital to work, which should be viewed as a positive for long-term investors." Bary struck a more cautious note: "Bending Spoons was a surprise" given its high valuation.

Why This Matters:

Berkshire offers a view of how concentrated corporate wealth behaves when no one has to put it to work. One company holding roughly $360 billion in cash—a sum larger than the economies of many countries—can wait years for the perfect opportunity as that money earns more when interest rates rise. The gains in this report go to shareholders: higher oil prices lift Chevron, Bending Spoons uses AI to cut costs, and a quiet storm season boosts insurance profits. The facts don't say who bears the costs of those business models, including workers at companies Bending Spoons acquires and trims. But they show how much market power and capital sit with a few institutions, and why questions about taxation, oversight and putting such wealth to productive use deserve public attention. Berkshire's next 13F disclosure, covering the September 30 snapshot, will offer a few more details.