New Berkshire Hathaway (NYSE:BRK.B) CEO Greg Abel has put the Warren Buffett-built conglomerate’s gigantic cash pile to work on share buybacks and stock purchases.
According to the group’s latest filing, Berkshire Hathaway became a net buyer of equities in Q2. As a result, the Omaha-based company’s mammoth cash reserves declined significantly for the first time since early 2022.
Cash pile put to work
Abel took over from Warren Buffett as Berkshire’s CEO a the start of this year. He has begun to deploy the record cash haul amassed by his mentor on buybacks and stock purchases.
During Q2, Berkshire bought back roughly $4.5 billion of its own shares. That marked an acceleration from the $235 million spent on buybacks in Q1.
Berkshire’s cash pile declined to $365.5 billion at the end of June from a record $397.4 billion three months earlier, as the conglomerate deployed capital through buybacks and other investments. The quarter included the closing of the conglomerate’s acquisition of housebuilder Taylor Morrison.
Buffett, now chairman of Berkshire Hathaway, handed Abel a cash pile unprecedented in corporate America.
The Sage of Omaha’s decision to hoard cash and sell down Berkshire’s listed stock portfolio was seen as a sign the legendary investor thought the market was overvalued. It also made investors skittish. Many suspected he was waiting for a market sell-off that would create a better buying opportunity.
Q2 earnings up 16%
Berkshire’s operating earnings rose 16% to $12.98 billion in Q2 as strength across its energy, railroad and manufacturing businesses more than offset weaker insurance results.
Insurance underwriting earnings plunged 13% to $1.73 billion in the quarter, while insurance investment income fell 9% to $3.06 billion.
Berkshire’s Q2 results were good rather than great, with insurance operations proving the main drag. But the key takeaway was that Abel is finally deploying its record cash pile. Shareholders have been eager for Buffett’s chosen successor to put some of the conglomerate’s enormous cash resources to work outside of treasuries.
Many will be delighted to see Abel putting his stamp on Berkshire Hathaway, whose shares have lagged the high-flying S&P 500 over the past year.
Abel’s decision to jump back into the market suggests he sees value. Not only in Berkshire Hathaway stock but also in a broader US equity market testing fresh all-time highs.
During Q2, Berkshire Hathaway spent $23 billion buying publicly-listed stocks including Google-parent Alphabet (NASDAQ:GOOG). As at 30 June, Alphabet was one of Berkshire’s five biggest equity holdings by market value, along with American Express (NYSE:AXP), Apple (NASDAQ:AAPL), Bank of America (NYSE:BAC) and Coca-Cola (NYSE:KO).
Berkshire disclosed a $10 billion investment in Alphabet earlier this year. At the time, Buffett told CNBC he had initiated the holding after consulting with Abel.
Read the press release here: https://www.berkshirehathaway.com/news/2026news.html
