Berkshire Sets Cash Record, Profit Surges Amid Buffett Exit Caution

Berkshire Hathaway has reported a cautious stance in the market, with cash reserves reaching a record $381.7 billion. This update comes as the company’s profit showed an upward trend, even as Warren Buffett prepares to step down as CEO after over 60 years in leadership.

Berkshire Hathaway’s Financial Performance

For the twelfth consecutive quarter, Berkshire Hathaway’s portfolio has seen more stock sales than purchases. The company’s equity portfolio, valued at $283.2 billion, includes major holdings such as Apple and American Express.

In the latest financial report, Berkshire revealed a 34% increase in third-quarter operating profit, amounting to $13.49 billion, which exceeded analyst expectations. The company’s net income rose by 17% to $30.8 billion, although revenue only grew by 2%, trailing behind the overall growth of the U.S. economy.

Market Challenges

• Economic uncertainty has negatively impacted consumer confidence.
• Sales growth was hindered at key subsidiaries, including Clayton Homes and Duracell.
• Analysts express concerns about Berkshire’s performance relative to the broader market.

Buffett’s Transition and Future Management

Warren Buffett, now 95, is preparing for his transition, with Vice Chairman Greg Abel, 63, set to take over as CEO. While Buffett will remain as chairman, Abel is expected to adopt a hands-on management approach.

The future utilization of Berkshire’s substantial cash reserves remains uncertain. Options may include pursuing the company’s first dividend since 1967 or seeking acquisitions. Recently, Berkshire announced plans to allocate $9.7 billion to acquire Occidental Petroleum’s chemical division.

Investor Sentiment and Stock Performance

Berkshire Hathaway’s stock price has notably trailed that of the broader market, dropping 12% since Buffett announced his retirement on May 3. The stock has also underperformed the S&P 500 by 32 percentage points and lags by 11 percentage points for the year 2025.

Investor apprehension regarding Berkshire’s outlook and impending management changes has led to increased selling pressure. Some investors express frustration over the company’s hesitance to utilize its cash reserves during a market rally.

Long-term Outlook

Despite recent challenges, analysts believe Berkshire remains well-positioned for the long term. The conglomerate operates nearly 200 businesses, including well-known brands like Dairy Queen and See’s Candies. While it’s been some time since a major acquisition, there is potential for Abel to enhance operational efficiency and deploy capital effectively.

As Berkshire Hathaway navigates this transitional period, all eyes will be on Greg Abel’s strategies for growth and cash management amid a fluctuating economic landscape.