A long-running seller becomes a buyer
Berkshire Hathaway bought $23.5 billion of equities in the second quarter while selling $3.7 billion, making it a net buyer of stocks for the first time in 14 quarters. The shift marks the clearest break yet with the cautious posture that defined the late Buffett era, when Berkshire sat on cash while passing on expensive markets. Purchases included about $10 billion more of Alphabet, though Buffett has said the original Google decision was his.
Buybacks surge under new leadership
Greg Abel oversaw an aggressive pace of repurchases. Berkshire repurchased roughly $4.5 billion of its own shares during the second quarter, up from $235 million in the first quarter, and bought more than $3.3 billion additional stock in July. Combined April-to-July buybacks totaled over $7.8 billion. The company is permitted to repurchase shares when prices fall below a conservatively calculated intrinsic value; Abel now performs that assessment in consultation with Buffett as chairman.
Cash pile falls but stays near record highs
The capital deployment is already visible on the balance sheet. Cash and Treasury bill holdings dropped by $15.5 billion over the quarter, from $380.2 billion at the end of March to $364.7 billion at the end of June. Despite the drawdown, reserves remain near record levels, leaving substantial resources for further deals, equity purchases, or buybacks.
Operating results reinforce the shift
Operating profit rose 16% to $12.98 billion in the quarter, supported by BNSF Railway, Berkshire Hathaway Energy, and the manufacturing, service and retailing group, while insurance underwriting and insurance investment income both declined. Manufacturing, service and retailing posted the largest absolute earnings increase, and Berkshire Hathaway Energy recorded the highest growth rate among major segments. Revenue climbed 10% to $101.81 billion, and net income more than doubled to $25.67 billion, though that figure includes unrealized investment gains. CFRA analyst Cathy Seifert told Reuters the results were a "pretty healthy beat" and said Abel was "slowly, gradually and subtly" stepping into his leadership role. In his first shareholder letter as CEO, Abel stressed that Berkshire would remain patient and disciplined.
What remains uncertain
The buyback step-up does not yet resolve how Abel will deploy capital across sectors beyond equities. The operating earnings increase also incorporates a $326 million foreign-exchange gain, compared with an $877 million loss a year earlier, accounting for roughly two-thirds of the $1.82 billion year-on-year rise, which tempers the underlying operating picture. Investors will be watching the post-earnings trading day on Monday for an initial read on whether the market endorses the new capital stance.
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