Berkshire Rally Recovers After Buffett Exit Plan

Berkshire Hathaway shares closed Friday at their highest level since Warren Buffett told shareholders at the May 2025 annual meeting that he planned to step down as CEO at the end of that year. The climb comes after investors questioned whether Berkshire would keep its “Buffett premium” following the announcement.

Class A shares ended Friday at $798,000, 1.4% below their all-time closing high of $809,350. Class B shares finished at $532.02, also 1.4% below their all-time closing high, $539.80. A loss Thursday broke a 10-session winning streak that had lifted Berkshire’s share prices by 5%. The shares bounced back more than 1% Friday.

When Buffett made his announcement, both share classes had closed at all-time highs. Over the next three months, they fell more than 14% as investors worried the “Buffett premium” was dissolving. Berkshire hit its post-meeting low in August 2025. The recovery since then hasn’t followed a straight line.

The transition and the cash reserve

Berkshire’s Class B shares have cut almost two-thirds of the 17.5-percentage-point deficit to the S&P 500 recorded on June 1. They’re still 6.0 percentage points behind the benchmark for the year. Berkshire’s market capitalization stood at $1,138,885,966,355, and its Class B price-to-earnings ratio, based on trailing 12 months, was 13.38.

Investors may welcome Berkshire putting some of its large cash reserve to work under CEO Greg Abel. The company repurchased $4.5 billion of its shares in the second quarter of 2026 and invested in Alphabet, Taylor Morrison Home, Lennar and Bending Spoons. Berkshire still held roughly $360 billion in cash, described as “a good symbol of continued patience under the new CEO.”

Berkshire listed cash at $365.5 billion 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% from March 31. Keefe, Bruyette & Woods analyst Meyer Shields said higher short-term interest rates could lift Berkshire shares because the company would be “making more money” on its cash.

Investments and operating businesses

Berkshire’s insurance operations have benefited from a quiet hurricane season so far. Higher oil prices helped its $19 billion stake in Chevron. Chevron shares closed Friday at an all-time high, up almost 36% since the start of July. Berkshire’s energy-related subsidiaries got a tailwind, too. The company may also have gained as investors moved away from high-flying AI and technology stocks 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. The stock was up 34% year-to-date, perhaps helped by KFC switching from Pepsi to Coke. Berkshire’s position gained $2.4 billion since the previous Friday, overtaking Alphabet to become its third-largest portfolio stake.

Bending Spoons stake

Berkshire’s investment in Bending Spoons, an Italian company that began trading on Nasdaq in the United States in July, was close to $1 billion and had risen substantially in the short term. The company buys internet businesses including AOL, Evernote and Vimeo, uses artificial intelligence to cut costs, then puts the savings toward acquisitions. Bending Spoons trades at a large multiple of its earnings, so it isn’t a typical Berkshire value investment.

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 sat almost 12% below Tuesday’s $37.86 close. The shares hit an intraday high of $58.56 and closed Wednesday up 41% at $53.46. After surrendering some gains in Friday’s technology-stock sell-off, they ended Friday at $47.07, up 24.3% over the three trading days since the announcement and 42.6% above Berkshire’s purchase price. The new shares carried a paper profit of nearly $141 million.

The announcement also disclosed that Berkshire had invested $600 million in Bending Spoons’ initial public offering more than three months earlier. The release didn’t specify how many shares Berkshire bought in July, and the company didn’t confirm the calculation. Berkshire’s portfolio snapshot as of September 30 was due to be disclosed the following month. Who at Berkshire decided to invest in Bending Spoons wasn’t known.