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Berkshire Earnings Surge 34% But Buffett Still Finds Nothing Worth Buying

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Published Nov 3, 2025
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Summary:
  • Berkshire Hathaway's operating profit jumped 34% to $13.485 billion in Q3, driven by a 200%+ surge in insurance underwriting income
  • Buffett conducted zero share buybacks despite stock pullback, pushing the cash pile to a record $381.6 billion
  • The company was a net seller of equities in Q3 for a $10.4 billion taxable gain, signaling Buffett sees few attractive investments

The Earnings Beat

Berkshire Hathaway reported a sharp rebound in operating profit.

Operating earnings from wholly owned businesses including insurance and railroads jumped 34% year-over-year to $13.485 billion in Q3. Insurance underwriting income drove the gains, surging over 200% to $2.37 billion.

Overall earnings, which include investment gains from publicly traded holdings, rose 17% to $30.8 billion.

The Cash Mountain

Buffett is sitting on an unprecedented cash pile. Berkshire's cash hoard swelled to a record $381.6 billion, up from the previous high of $347.7 billion set in Q1.

Why so much cash? Two reasons: Buffett conducted zero share buybacks and was a net seller of equities.

Despite Berkshire's stock pulling back from all-time highs, Buffett didn't buy back a single share during the first nine months of 2025. The company also net sold equities in Q3 for a taxable gain of $10.4 billion.

What This Signals

When Warren Buffett accumulates nearly $400 billion in cash, it sends a clear message: He can't find anything worth buying at current prices.

Buffett is famous for being greedy when others are fearful. The fact that he's holding record cash while markets hit new highs suggests he thinks valuations are stretched.

The zero buybacks are particularly notable. Berkshire's stock is up just 5% in 2025 versus the S&P 500's 16.3% gain. The stock has tumbled double digits from all-time highs. Yet Buffett still doesn't think it's cheap enough to repurchase.

The Leadership Transition

Buffett announced in May he's stepping down as CEO at year-end after six legendary decades. The 95-year-old will remain chairman of the board.

Greg Abel, Berkshire's vice chairman of noninsurance operations, will take over as chief executive. Abel will also start writing the annual letters in 2026, ending Buffett's tradition of penning the highly anticipated missives.

The stock's pullback partially reflects the "Buffett premium" - the extra price investors pay because of his unmatched record and capital allocation skills. With Buffett stepping aside, some of that premium is evaporating.

The Occidental Deal

Last month, Berkshire announced its largest deal since 2022 - buying Occidental Petroleum's petrochemical unit OxyChem for $9.7 billion in cash.

That's Berkshire's biggest acquisition since paying $11.6 billion for insurer Alleghany in 2022. The deal shows Buffett is willing to deploy cash for the right opportunity, just not for stocks at current prices.

The Bottom Line

Berkshire's strong operating results show the underlying businesses are performing well. The 34% jump in operating profit and 200%+ surge in insurance underwriting demonstrate the conglomerate's earnings power.

But the record $381.6 billion cash pile tells a different story about market conditions. Buffett is essentially saying: "I can't find anything attractive to buy right now."

The zero buybacks despite Berkshire's stock underperformance reinforce that message. If Buffett won't buy his own stock when it's lagging the market, what does that say about his view of valuations generally?

Being a net seller of equities for a $10.4 billion gain suggests Buffett is taking profits and raising cash, not finding new opportunities.

With Buffett stepping down as CEO at year-end, this may be one of his final quarterly reports. The massive cash position hands successor Greg Abel enormous firepower for future deals. But it also reflects Buffett's view that patience is warranted at current market levels.

For investors, Buffett's cash accumulation historically signals caution. When the greatest investor of all time is holding nearly $400 billion rather than deploying it, markets might be overheated.

The strong operating earnings are good news for Berkshire shareholders. But the record cash pile and zero buybacks send a warning about broader market valuations that investors should heed.

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