Berkshire Hathaway has trailed the S&P 500 by nearly 40 percentage points since its 2025 annual meeting. The move reflects growing expectations for a higher book value in the June quarter and a broader rotation into defensive names.
Barron's estimates that Berkshire's book value per Class A share increased by roughly 3% during the June quarter, reaching approximately $522,000. That increase comes partly from operating earnings and partly from gains in its equity portfolio.
The current stock price is 1.45 times book value - well below the peak of 1.8 reached in May 2025, when shares traded above $800,000.
Investors are also rotating out of the Magnificent Seven and other momentum stocks. As one portfolio manager noted, "Berkshire, with its stable earnings and massive cash pile, is the ultimate defensive play." The stock's year-to-date gain remains below 1% for both share classes.
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Berkshire's stock buyback program is a major focus for investors. The company bought back only $235 million of stock in the first quarter, disappointing some Berkshire holders. The buyback restarted in early March, but it lasted just one day.
After that, Berkshire halted repurchases for the remainder of the quarter and into mid-April. Greg Abel, the CEO who succeeded Warren Buffett at the end of 2025, highlighted the restart in a CNBC interview.
In 2021, Berkshire repurchased more than $25 billion of its shares, and analysts estimate the company could buy back roughly $50 billion per year, equivalent to about 5% of its market capitalization.
The company's buyback program has traditionally boosted shareholder value, with Buffett often using it when the stock trades below intrinsic value. This could provide further support for the stock price.
The shift toward Berkshire underscores a broader market trend as tech stocks have fallen sharply in recent weeks. Investors are seeking stable earnings and strong balance sheets, qualities that Berkshire has in abundance. With its diverse portfolio of insurance, railroad, energy, and consumer businesses, the conglomerate offers a buffer against economic uncertainty. Moreover, the company's leadership transition to Greg Abel has proceeded smoothly, providing continuity for shareholders.
Investors will be watching Berkshire's stock buyback activity closely when the company releases its second-quarter earnings report expected around Aug. 1.
Berkshire's massive cash reserve - recently topping $180 billion - allows it to weather market downturns and seize buying opportunities, reinforcing its status as a haven during uncertain times. For many years, Berkshire's large cash reserve has been a fundamental reason for its reputation as a safe investment during turbulent periods.
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