Track market-moving stories before they get noisy

Berkshire Hathaway (BRKA +0.75%)(BRKB +0.90%) has spent the past year standing still. The B shares trade near $510 as of this writing, and they haven't traded below about $464 or above about $538 over the past 52 weeks.

Sometimes a flat stretch like that can mean the market thinks a company's best days are behind it. And sometimes the price simply stops moving while the business keeps going, leaving the stock a little cheaper with each passing quarter.

I think Berkshire's flat year is mostly the second kind. The company's first year under CEO Greg Abel (Warren Buffett remains chairman) has featured growing profits and something Berkshire hasn't been in years: a buyer.

Image source: The Motley Fool.

The business didn't go sidewaysBerkshire reported its second-quarter results in early August, and the headline figure was strong. Operating earnings grew 16% from the same quarter a year ago, to about $13 billion. Operating earnings are the company's preferred yardstick because they leave out the swings in the value of its enormous stock portfolio, which accounting rules otherwise pour into reported profit.

Berkshire's businesses outside of insurance carried the quarter. Earnings from manufacturing, service and retailing jumped 24% year over year, to about $4.5 billion, Berkshire Hathaway Energy grew its earnings 27% to $891 million, and the BNSF railroad added 6% to about $1.6 billion. Insurance, however, was the soft spot -- underwriting profit fell 13% year over year, and insurance investment income slipped 9%. Of course, a currency swing on debt Berkshire owes in foreign currencies also flattered the total, so the underlying growth was more modest than 16%.

Still, the direction is right. Quarterly operating earnings have been stepping up -- about $11.2 billion a year ago, about $11.3 billion in the first quarter of 2026, and about $13 billion in the most recent period.

And the insurance operation kept doing its quieter job. Float (the premium money Berkshire holds and invests before claims come due) grew about $1.1 billion in the first half, to about $177.5 billion.

Berkshire is a buyer againThe earnings aren't the main reason to like the stock here, though. The buying is.

Berkshire had been a net seller of stocks for 14 consecutive quarters. That streak ended in the second quarter, when the company bought nearly $20 billion more in equities than it sold. Across the first half, purchases totaled about $39 billion against about $28 billion of sales, and Alphabet now sits among Berkshire's five largest stock holdings.

The company also closed two acquisitions this year -- the industrial chemicals maker OxyChem in January and the homebuilder Taylor Morrison in late July, for a combined price of more than $16 billion.

And after a first quarter with hardly any buybacks, Berkshire stepped up the pace and repurchased about $4.5 billion of shares in the second.

In short, Berkshire can afford all of it. The company was still holding about $365 billion in cash and Treasury bills at the end of the second quarter.

The price hasn't run awayAt about $510 per B share, Berkshire's market value is about $1.1 trillion, against about $750 billion of shareholders' equity. That works out to nearly 1.5 times book value -- hardly cheap, but not a level with years of good news already priced in. And the multiple of book value has drifted lower this year, because shareholders' equity grew about 4% over the first half while the share price barely moved.

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Berkshire's own repurchase policy offers a more practical test. After all, the company buys back stock only when Abel, after consulting with Buffett, believes the price sits below a conservative estimate of what Berkshire is worth. In May, Berkshire paid an average of about $476 per B share. In June, it paid about $488.

As of this writing, the stock trades about 5% above that June average.

Sure, the quiet year didn't come from nowhere. Insurance results have softened, a company already valued near $1.1 trillion is never going to compound the way the Berkshire of decades past did, and the stock could stay quiet for a while longer.

So, should you buy Berkshire Hathaway stock right now?

I think so. The businesses are growing, and the cash is finally moving. And the stock costs only a little more than what the company itself was recently willing to pay for it. I'd buy the shares today and plan on holding them for years to come.

Berkshire Hathaway (BRKA +0.28%) (BRKB +0.06%) has not had many changes to its top five holdings. Apple, Bank of America, American Express, Coca-Cola, and Chevron have pretty much been locked in the top five spots over the past four years.

But last quarter, a new stock crashed the party as Alphabet (GOOG +0.61%) (GOOGL +0.59%) moved into the top five, displacing Chevron.

CEO Greg Abel and his team made a massive investment in the "Magnificent Seven" technology giant last quarter. They added 24.5 million shares of Alphabet in Q2, according to the Berkshire Hathaway 13F filing, increasing its stake by 45%.

Berkshire now holds about 79 million shares of Alphabet, the parent of Google, worth about $28.2 billion. That accounts for about 9.41% of the total portfolio, making it the fourth-largest holding. Only Apple (22%), American Express (17%), and Coca-Cola (11%) are larger.

Image source: Getty Images.

Capex concerns Berkshire Hathaway didn't even own a single share of Alphabet stock until then-CEO Warren Buffett added almost 18 million shares for a $4.4 billion stake just one year ago, in the third quarter of 2025. Berkshire added another 36 million in Q1 and 24.5 million in Q2.

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Over the past year, Alphabet stock has returned about 37%; however, shares have tumbled recently, down about 7% over the past month. Alphabet had a strong second quarter with revenue up 24% year over year to $120 billion and operating income up 30% to about $41 billion.

Investors are concerned about artificial intelligence (AI) spending and cash flow depletion. Alphabet is investing heavily in AI infrastructure for its cloud business to meet rising demand. In Q2, Alphabet raised its guidance for capital expenditures (capex) this year to $195 billion to $205 billion, up from the previous range of $180 billion to $190 billion.

The increase is mainly to accelerate capacity expansion to meet growing demand. But the spending has depleted Alphabet's free cash flow. It reported a cash outflow of $5.8 billion in the quarter, marking the first quarter since the company went public with negative free cash flow.

"We expect the free cash flow will remain under pressure driven by our investments in technical infrastructure, which enables us to capitalize on the AI opportunity and continue to drive attractive returns," CFO Anat Ashkenazi said on the earnings call.

The Amazon parallel Amazon found itself in a similar place at the beginning of the year, and the market reacted similarly. But Amazon argued that it had to bite the bullet and spend the money to build the capacity to meet future demand.

In its most recent earnings report, Amazon showed that its investments are already paying off, as the stock soared post-earnings on improved cloud revenue.

The recent sell-off has put Alphabet stock at an extremely low valuation, trading at just 16 times earnings, which is right up Berkshire's alley as a firm that looks for good stocks at reasonable valuations.

That would describe Alphabet, the dominant market leader in internet search and one of the top cloud computing stocks.

American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Dave Kovaleski has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, American Express, Apple, Berkshire Hathaway, and Chevron. The Motley Fool has a disclosure policy.

Berkshire Hathaway B (BRK.B - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Shares of this company have returned -2% over the past month versus the Zacks S&P 500 composite's -0.4% change. The Zacks Insurance - Property and Casualty industry, to which Berkshire Hathaway B belongs, has lost 2.6% over this period. Now the key question is: Where could the stock be headed in the near term?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Berkshire Hathaway B is expected to post earnings of $5.66 per share for the current quarter, representing a year-over-year change of -9.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +4.5%.

For the current fiscal year, the consensus earnings estimate of $21.67 points to a change of +5.1% from the prior year. Over the last 30 days, this estimate has changed +3%.

For the next fiscal year, the consensus earnings estimate of $22.07 indicates a change of +1.9% from what Berkshire Hathaway B is expected to report a year ago. Over the past month, the estimate has changed +1.7%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Berkshire Hathaway B is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For Berkshire Hathaway B, the consensus sales estimate for the current quarter of $97.3 billion indicates a year-over-year change of +2.5%. For the current and next fiscal years, $392.1 billion and $409.7 billion estimates indicate +5.6% and +4.5% changes, respectively.

Last Reported Results and Surprise HistoryBerkshire Hathaway B reported revenues of $101.81 billion in the last reported quarter, representing a year-over-year change of +10%. EPS of $6.02 for the same period compares with $5.17 a year ago.

Compared to the Zacks Consensus Estimate of $95.3 billion, the reported revenues represent a surprise of +6.83%. The EPS surprise was +14.89%.

Over the last four quarters, Berkshire Hathaway B surpassed consensus EPS estimates three times. The company topped consensus revenue estimates just once over this period.

ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Berkshire Hathaway B is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Berkshire Hathaway B. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

COLOGNE, Germany--(BUSINESS WIRE)--Berkshire Hathaway Specialty Insurance Names Katharina Rütz Head of Executive & Professional Lines in Germany.

Greg Abel just revealed the single physical constraint he believes will determine which AI data center projects actually get built, and it has nothing to do with chips or capital.

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Berkshire Hathaway’s new CEO Greg Abel shared in a CNBC interview on September 2 that he believes the biggest constraint on the AI boom will be the power grid: “I’ve sort of always had a strong view that energy would be the constraint. We can produce the energy. It’s how long it would take to get the sites prepared and be in a position where they could serve the data centers. And I continue to see that as a big constraint,” he said.

Why Site Readiness Is the Energy Bottleneck Greg Abel reported that data centers already represent roughly 8% of Berkshire Energy’s load in Iowa, with incremental load expected. On the demand side, Berkshire Hathaway (NYSE:BRK-B | BRK-B Price Prediction) is looking at a customer set that includes Alphabet itself, which reported Q2 FY2026 capex of $44.92B and has guided to $175B to $185B of 2026 capex to build out AI infrastructure.

Independent research shows that data centers are the largest driver of U.S. electricity demand growth, according to the Grid Strategies 2025 load growth report. However, site readiness, permitting, and interconnection timelines remain major bottlenecks to adding more electricity supply.

Why Berkshire Added Billions More to Alphabet Greg Abel walked through how Berkshire’s latest addition to its Alphabet (NASDAQ:GOOGL) position actually happened. Warren Buffett initiated the original purchases roughly 15 months ago, so the recent trade added to the position. “In late May, I received a call on a Sunday morning to see if we wanted to participate in their upcoming equity offering. I called Warren, and I said we had a significant opportunity to continue to invest in Google, but with a significant block. We discussed the size and the 6.5% discount. And we were comfortable with that,” Abel said.

Berkshire invested $6.5 billion at a 6.5% discount, alongside an additional $10 billion block bought on the open market. Berkshire’s Q2 filing described a broader deployment of roughly $23.5 billion into equities, with roughly $19.8 billion in net equity purchases after accounting for $3.7 billion in stock sales.

Abel’s rationale behind the Alphabet investment was straightforward: “We all are seeing and feeling the impact of AI. So we knew it was going to have a significant impact on America and businesses. We saw Google as a significant player.“

Key Takeaways Abel was explicit about how Berkshire Energy plans to underwrite hyperscaler load. “We are interested in serving these hyperscalers, if there was no impact to the rates of our other customers. And in fact, we’ve pretty much taken the approach that there has to be a net benefit to our customers,” he said. Given the rising political friction around data center-driven utility bills, that is a notable public commitment.

Abel’s message is that AI infrastructure is increasingly constrained by the physical grid rather than computing demand itself. For investors, that pushes the opportunity beyond chipmakers and toward the utilities, grid equipment, and power infrastructure needed to actually connect the next generation of data centers.

Contact [email protected] for any questions or corrections.

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Berkshire Hathaway CEO Greg Abel noted the growing resistance to the construction of data centers across the U.S. in an interview with CNBC's Becky Quick on Wednesday morning.

"There is a lot more pushback in the communities across the U.S.," Abel said.

Berkshire's interest in the ongoing computing facility buildout is mostly related to power and electricity generation for the sites, Abel commented, noting that the conglomerate wants to be in business with supercomputing companies provided they keep their costs contained.

"We are interested in serving these hyperscalers ... if there was no impact to the rates of our other customers," he said.

Investors and analysts on Wall Street have echoed Abels comments, pointing to increasing organized political resistance to major computing construction projects that can siphon local natural resources.

New York State has enacted a moratorium on data center construction, while many other states have pending bans and restrictions of varying intensity. There are about 4,700 data centers in the U.S. and the number is growing.

Analysts at Mizuho said in a Tuesday note to clients that investors think data centers could be a significant issue in the midterm elections.

"This is clearly an evolving situation as some investors question the set-up with upcoming mid-term elections and validity of claims around resource consumption and limited long-term job creation," Vikram Malhotra at Mizuho wrote on Tuesday.

I've been a fan of Berkshire Hathaway (BRKA -0.60%) (BRKB -0.34%) for a long time, and Berkshire's been a great investment for years. The conglomerate built by Warren Buffett posted an average compounded annual return of 19.7% from 1965 to 2025 -- a huge premium compared to the S&P 500's gain of 10.5%.

Overall, Berkshire's gain of 6,099,294% under Buffett's stewardship was light-years better than the broader index's 46,061% gain in the same period. Buffett truly is a hard act to follow after his retirement as CEO at the end of 2025.

Image source: Getty Images.

That's what CEO Greg Abel is coming up against in his first year at the helm. So far, Abel hasn't been able to replicate Buffett's success in 2026. Since he took over, Berkshire Hathaway stock is essentially flat -- had you invested $1,000 when Abel took the top job, you'd be the proud owner of $1,005 today.

That's not a great result, by anyone's standard. In fact, Berkshire Hathaway is on track for its worst performance in over a decade.

Year

Berkshire Total Return

S&P 500 Total Return

2015

(12.5%)

1.4%

2016

23.4%

12.0%

2017

21.9%

21.8%

2018

2.8%

(4.4%)

2019

11.0%

31.5%

2020

2.4%

18.4%

2021

29.6%

28.7%

2022

4.0%

(18.1%)

2023

15.8%

26.3%

2024

25.5%

25.0%

2025

10.9%

17.9%

2026 (as of Aug. 31)

0.47%

13.5%

Data source: Berkshire Hathaway.

Should you be concerned? I don't think so The investment thesis for Berkshire hasn't changed. As Abel wrote in his first letter to shareholders as CEO, "Our owners' time horizon extends beyond the tenure of any individual CEO."

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Even though Berkshire has made notable changes to its portfolio this year, including exiting several positions, it's still a mammoth conglomerate that owns dozens of companies, including Dairy Queen, Duracell, GEICO, and the BNSF Railway. It also has a massive $359.2 billion investment portfolio that is heavy in dividend-paying stocks such as Coca-Cola, American Express, and Bank of America. Berkshire also has a strong cash position of $365.5 billion at the end of the second quarter.

Its earnings report for the second quarter was solid -- revenue of $101.81 billion that was up 10% from a year ago, net profit of $25.67 billion, and earnings of $6.02 per share. Profits from its Berkshire Hathaway Energy unit were up 27% from a year ago to $891 million, and its manufacturing, service, and retailing segment saw earnings of $4.47 billion, up 24%.

Buffett always advocated that investors keep a long view, so looking at Abel's first eight months doesn't predict what the future holds for Berkshire Hathaway's shares. But if investors were looking for a boom in the early days of his stewardship, they are surely disappointed with the stock price.

Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends American Express and Berkshire Hathaway. The Motley Fool has a disclosure policy.

A Berkshire-flavored ETF promises 15% annual income built on Buffett's name, but the fee structure and hidden upside caps tell a very different story than the fund's marketing does.

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Warren Buffett spent decades telling investors that costs are the enemy of compounding. A new ETF wraps his portfolio in a covered call overlay and charges nearly 1% for the privilege. It’s one of the more expensive Buffett tributes on the market, and the bill arrives quietly before the fund does anything at all.

VistaShares Target 15 Berkshire Select Income ETF (NYSEARCA:OMAH) pitches a 15% annual income target built from selling call options on a Berkshire-linked U.S. equity basket tracking the Solactive VistaShares Berkshire Select Index. The marketing positions itself as Buffett-plus-income. The mechanics are pricier and more constraining than the factsheet lets on.

What the 0.98% Fee Actually Costs OMAH carries a net expense ratio of 0.98%. On a $10,000 position, that is $98 a year drained from NAV before anything else happens. Berkshire Hathaway (NYSE:BRK.B) shares carry no expense ratio at all. You pay a commission (usually zero), and you own the company.

A 0.98% annual fee reduces your ending balance by roughly 9% after 10 years and roughly 18% after 20 years, regardless of what the underlying does. Owning BRK.B directly avoids that entire line item.

Overlay Cap Nobody Advertises The Target 15 income comes from selling call options against the underlying basket. When a stock rallies past the strike, OMAH’s upside on that name is capped. The April 30, 2026 holdings disclose short calls on the underlying basket including index-linked strikes BRKB C472.5, AAPL C277.5, GOOGL C355, and MA C510. Every dollar those stocks travel above those strikes is a dollar shareholders do not fully collect.

The distributions themselves matter too. OMAH pays monthly, most recently distributing $0.23263 per share on July 27, 2026, with trailing 12-month distributions totaling $2.82227 per share. For a covered-call fund, however, the amount distributed does not necessarily equal income earned by the portfolio. Distributions can include ordinary income, capital gains, and return of capital. Return of capital generally reduces an investor’s cost basis and defers taxes until the shares are sold, making the tax character of the distribution important when evaluating the fund’s headline yield.

Monthly income is the whole reason a fund like this exists, and there are cheaper ways to get a check every 30 days (we rounded up seven monthly payers in a free report here: The 7 Monthly Dividend Stocks That Pay You Every 30 Days).

Portfolio You Are Actually Buying Investors hear “Berkshire ETF” and assume they are getting Berkshire. Only 8.99% of net assets, however, is invested directly in BRK.B. The rest is spread across a 96-stock portfolio. Apple accounts for 9.97%, American Express 8.35%, Occidental Petroleum 5.84%, and Coca-Cola 5.03%. These are companies closely associated with Berkshire’s equity portfolio, but investors can also own them directly without paying OMAH’s 0.98% expense ratio.

Scoreboard: 15% Overlay vs. Just Owning BRK.B Recent price action favors the overlay. Over the year ending August 21, 2026, OMAH rose 10.36% while BRK.B rose 1.48%. Add distributions, and OMAH’s total return over that stretch looks strong.

However, over longer horizons the picture inverts. BRK.B is up 73.81% over five years and 233.28% over ten years. OMAH only launched on January 1, 2025, so there is no matching decade to compare.

Cheaper Mirror The cleanest lower-cost swap is BRK.B itself. Expense ratio: 0%. Distributions: none. Tax drag from monthly payouts: none. You lose the 15% income target and the diversified basket. In exchange, you get exactly what OMAH’s name invokes. For broader Buffett-style large-cap exposure, Vanguard S&P 500 ETF (NYSEARCA:VOO) holds most of the same mega-caps at a fraction of OMAH’s fee.

What This Means for You OMAH is transparent about its strategy. What it downplays is the trade-off. Here is the question worth asking before you buy. Are you paying 0.98% a year, plus a capped upside, for income you could partly replicate yourself, and giving up the long compounding Buffett built his reputation on?

Contact [email protected] for any questions or corrections.

For the first time in well over half a century, Berkshire Hathaway (BRKA +0.27%)(BRKB +0.26%) entered the year in uncharted territory. The retirement of CEO Warren Buffett on Dec. 31 meant his longtime understudy, Greg Abel, would oversee day-to-day operations and the company's $358 billion investment portfolio.

Abel hasn't wasted any time making his presence felt. He completely overhauled Berkshire's portfolio in the first quarter and continued making sizable changes in the June-ended quarter. As of Aug. 20, Berkshire has a more tech-oriented portfolio, with approximately 30% of the company's invested assets tied up in just two preeminent artificial intelligence (AI) stocks: Apple (AAPL +1.63%) and Alphabet (GOOGL +1.74%)(GOOG +1.53%).

Warren Buffett retired as Berkshire Hathaway's CEO on Dec. 31. Image source: The Motley Fool.

Apple: $71 billion (19.8% of invested assets) As has been the case for quite some time, Apple remains Berkshire Hathaway's largest position.

When Warren Buffett first began adding shares of Apple in early 2016, he did so not as a tech-focused investor. Rather, he marveled at consumers' incredible loyalty to the brand and their willingness to pay a premium for its physical devices. Apple is among a small handful of influential businesses that are very successful in keeping consumers within their product and service ecosystem.

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But this stalwart company is evolving, and AI is very much part of its future. In addition to Apple's emphasis on higher-margin and loyalty-driving subscription services, the company launched Apple Intelligence for its physical devices less than two years ago. This tech relies on generative AI and your personal preferences to simplify tasks, such as writing and summarization tools.

The expectation is that Apple Intelligence will bolster demand for iPhone, iPad, and Mac, leading to higher sales and enhanced customer loyalty. With Apple trading at a historically expensive forward price-to-earnings ratio of 33, the company will need its AI investments to pay off.

Image source: Getty Images.

Alphabet: $36 billion (10.1% of invested assets, including both share classes, GOOGL and GOOG) However, the bigger storyline of Abel's tenure has been his aggressive purchasing of both classes of Alphabet stock. With roughly $17 billion spent buying shares of Google's parent company in the second quarter, Alphabet is now Berkshire's fourth-largest position (as of Aug. 20).

Both Abel and his predecessor appreciate businesses with sustainable moats, and that's precisely what Alphabet delivers. Google held a 91% share of global internet search traffic in July, according to GlobalStats. Meanwhile, YouTube is the second-most-visited social site on the planet. Collectively, Alphabet draws in online advertisers like nobody's business.

GOOGLE'S $GOOGL Q2 EARNINGS HIGHLIGHTS

- Google total revenue: +24% YoY
- Search & Other Ads: +17% YoY
- Google Cloud: +82% YoY, backlog now at $514B
- 1P Model APIs: ~22B tokens per minute, up from 16B+ last quarter
- YouTube Ads: +13% YoY
- Gemini App: 950M monthly active... pic.twitter.com/cUdBZI9a6C

-- Evan (@StockMKTNewz) July 22, 2026 But it's the company's AI operations that are expected to drive the bulk of its operating cash flow growth going forward. Ever since Alphabet began integrating generative AI and large language model solutions into Google Cloud, sales for this high-margin segment have skyrocketed. Google Cloud's revenue surged 82% in the second quarter, with annual run rate sales now topping $99 billion.

The last two quarters suggest that Berkshire Hathaway's new boss has found his version of Apple in Alphabet. Although Google's parent company isn't as cheap as it's been in recent years, its sustainable advertising moat and otherworldly AI sales growth clearly have Abel's attention.

Alphabet (GOOG +1.53%) (GOOGL +1.74%) has become one of the most popular artificial intelligence (AI) investments among major hedge funds. It was one of the last stocks that legendary CEO Warren Buffett bought at Berkshire Hathaway (BRKA +0.27%) (BRKB +0.26%), and the firm is still purchasing more shares of it even after he retired from that role. David Tepper, who runs Appaloosa Management, also loaded up on Alphabet shares during the last quarter, and the position now makes up nearly 9% of his firm's portfolio.

Those are some major players confidently investing in Alphabet, despite its strong performance over the past year (it's up over 65%). I think there's a good chance that it can go higher from here, as it's one of the top big tech stocks available on the market.

Image source: The Motley Fool.

Alphabet's growth phase is just beginning Alphabet is benefiting from AI in a handful of ways. First, it has successfully implemented AI into some of its legacy products, including Google Search and YouTube. Just over a year ago, both of these segments were potential victims of AI. With Alphabet embracing and incorporating AI feature sets, they have evolved to become even more dominant. During Q2, Google Search's revenue rose 17% year over year, while YouTube ads increased by 13%. Those are solid growth figures for legacy business units, and showcase that Alphabet can successfully integrate AI into most of its products.

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The biggest area where AI is boosting Alphabet's financials is its Google Cloud division. Alphabet's cloud computing wing is seeing major growth, but at a huge cost. When you hear about Alphabet having capital expenditures bills of $200 billion or greater in 2026, this is where the majority of the money is being spent. However, investors are seeing early signs of this paying off.

In Q2, Google Cloud's revenue increased by 82% year over year. That's an incredible growth rate, and helped boost Alphabet's overall growth rate to 24%. Alphabet is growing at its fastest pace in years, and with Google Cloud slated to continue growing at a rapid pace over the next few years, right now could be the start of a major expansion in Alphabet's business.

Alphabet's stock is also reasonably priced, trading at 28 times operating earnings.

GOOG Operating PE Ratio data by YCharts

While I usually would use net income to value a stock like Alphabet's, its current price-to-earnings (P/E) ratio is skewed by a handful of one-time gains on investments. From this perspective, Alphabet is trading around its average valuation over the past 15 years.

I think Alphabet is a great stock to buy at these levels; an investor should consider following the smart money like Berkshire Hathaway and David Tepper and scoop up shares.

These days, the vaunted equity portfolio of Berkshire Hathaway (BRKA +0.27%)(BRKB +0.26%) is bursting with massive stakes in some of the world's best-known companies. There's the nearly 228 million-share-strong Apple position, for instance, and it says something about Berkshire that this holding has actually been reduced over time.

With the company's investing power, nearly every equity position it opens is large-scale by default. So those stakes represent large chunks of total shares outstanding. American Express is a fine example, with Berkshire owning more than 22%.

Yet Berkshire's largest holding proportionally is in an under-the-radar company that many investors have never heard of.

Image source: The Motley Fool.

A very healthy pick This Berkshire stake winner is -- drum roll, please -- DaVita (DVA +1.01%)!

Da who?

As of July 31, Berkshire owned just under 28.7 million shares of the company, a niche healthcare business that operates a network of kidney dialysis centers throughout the United States. Those shares give Berkshire a whopping stake of almost 45% in DaVita's equity.

And the kicker is, that high percentage is after more than a year of Berkshire's periodically trimming its stake. The mostly static position it held from 2020 to 2024 was reduced with a series of relatively small sell-offs beginning in early 2025. Since then, the holding has melted from slightly over 36.1 million shares to the present level.

It's important to note here that, over the years, DaVita has been an aggressive purchaser of its own stock. So an outstanding share count that once stood above 240 million is now slightly over 64 million.

Since its initial DaVita purchase way back in 2011, Berkshire management has stayed mum about its reasoning for the investment. That's probably because the DaVita buy-in was apparently the brainchild of Ted Weschler, Berkshire's investment manager. Berkshire founder and guiding light Warren Buffett likes to expound on his own stock picks, but is usually quieter about other selections.

Portfolio standout Those small, recent divestments could simply be acts of profit-taking. After all, DaVita stock has been quite the rock star so far this year; even after a post-earnings slide earlier this month, the company's equity is up by more than 56% year to date. That beats the heck out of the benchmark S&P 500 index's 12% gain.

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DaVita is the kind of company Buffett has always liked, and a type that his successor as Berkshire CEO, Greg Abel, seems to favor too. It focuses intensely on one essential service, has an impressively high moat as a trusted operator in a business with high barriers to entry, and is reliably profitable.

It also delivers the occasional blowout earnings report. Much of that impressive share price rise stems from the company's beat-and-raise first-quarter earnings.

It blew past analyst estimates for adjusted profitability (which rose by 21% year over year to $198 million) and topped those for revenue, which increased 6% to over $3.4 billion. This gave management the confidence to increase its guidance for adjusted earnings per share (EPS). That's now $14.10 to $15.20 per share, up from the previous estimate of $13.60 to $15.

Zooming out a bit, on an annual basis, DaVita almost always delivers a bottom-line profit. This can be a bit up and down, but it consistently manages to increase its revenue. Over the past four years, it's advanced from 2022's $11.6 billion to last year's $13.6 billion. Analysts expect this to continue, with increases in both line items this year and next.

Still a sleeper Businesses like Apple and American Express are relatively easy to understand, not least because of their familiarity to the average consumer in this country. Healthcare stocks can be more daunting, as some might think they offer products and services that are hard for the average Joe or Jill to comprehend.

I don't feel DaVita is one of those companies, as it's, again, offering a standard, straightforward medical procedure. As a stock, even with that run-up so far this year, it seems well below its ceiling -- forward P/E is barely over 12, which feels inexpensive for a company that produces revenue growth and profitability more often than not.

We should never blindly follow a famous investor, powerful CEO, or well-known company into or out of an investment. So no one should own DaVita simply because it's a Berkshire equity portfolio mainstay. That said, it looks like a fine stock to hold all on its own, underpinning a company whose growth story appears far from over.

This is a truly groundbreaking year for Berkshire Hathaway (BRKA +0.27%)(BRKB +0.26%). For the first time in well over half a century, the trillion-dollar Berkshire isn't being led by billionaire Warren Buffett. Following the Oracle of Omaha's retirement as CEO on Dec. 31, the torch was officially passed to his protégé, Greg Abel.

Abel hasn't wasted any time transforming Berkshire Hathaway's $359 billion investment portfolio. In addition to jettisoning 16 holdings in the first quarter, he's rearranged the puzzle pieces of his company's top-five positions. Longtime holdings Coca-Cola (KO +0.67%) and Bank of America (BAC +1.88%) have both been knocked down a peg, with the new apple of Abel's eye, Google parent Alphabet (GOOGL +1.74%)(GOOG +1.53%), officially becoming Berkshire's No. 3 position.

Warren Buffett retired as Berkshire Hathaway's CEO on Dec. 31. Image source: The Motley Fool.

Coca-Cola isn't going anywhere, but BofA may be a different story Despite ceding its spot as Berkshire's third-largest holding, Coca-Cola isn't going anywhere. Coke was labeled as an "indefinite" holding by former CEO and current board chair Warren Buffett, and Abel has vowed to (more or less) adhere to the same investing principles that the Oracle of Omaha followed.

The real beauty of Berkshire's stake in Coca-Cola is its jaw-dropping yield on cost. Coca-Cola is Berkshire's longest-tenured holding (since 1988) and sports an ultra-low cost basis of around $3.25 per share. Given that Coca-Cola has increased its dividend for 64 consecutive years and is currently doling out $2.12/share annually, Berkshire's yield relative to its cost basis is an astounding 65%!

Suffice it to say, Coca-Cola isn't going anywhere.

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Bank of America is another story. Although Warren Buffett has always been a huge fan of financial stocks, BofA isn't the bargain it once was. Since Berkshire's former CEO initially took a position in Bank of America's preferred stock in August 2011, its common stock has vaulted from a 62% discount to book value to a 59% premium to book value.

Perhaps it's no surprise that Berkshire's bosses have pared down their company's stake in BofA for eight consecutive quarters.

Image source: Getty Images.

However, the biggest change observed under Greg Abel has been the relentless buying of Alphabet stock. Including an announced $10 billion private placement, Abel green-lit the purchase of $17 billion of Alphabet's Class A (GOOGL) and Class C (GOOG) stock, combined, in the second quarter.

As of the closing bell on Aug. 25, the market value of Berkshire's Alphabet stock was $16 million more than its stake in Coca-Cola.

Alphabet becoming Berkshire's No. 3 holding is in part a function of its virtual monopoly status. Google has accounted for 89% to 93% of global internet search engine traffic over the last decade, and YouTube is the second-most-visited social site behind Google. In other words, Alphabet is ideally positioned to capitalize on a growing advertising market.

$GOOG Alphabet Q2 FY26:

• Revenue +24% Y/Y to $119.8B ($2.8B beat).
• Operating margin 34% (+2pp Y/Y).
• $98B net gains from equity investments.

☁️ Google Cloud:
• Revenue +82% Y/Y to $24.8B
• Operating margin 36% (+15pp Y/Y).

▶️ YouTube ads +13% to $11.1B pic.twitter.com/seYlITzfg6

-- App Economy Insights (@EconomyApp) July 22, 2026 But it's the company's artificial intelligence (AI) ambitions that appear to have Berkshire's new boss intrigued. Since Alphabet integrated generative AI and large language model capabilities into Google Cloud, the world's No. 3 cloud infrastructure services platform by total spend, sales growth has gone parabolic. Sales for this high-margin segment skyrocketed 82% in the June-ended quarter.

Whereas Apple was Warren Buffett's foundational puzzle piece for the last decade, Alphabet may hold that role for Greg Abel going forward.

Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Alphabet and Bank of America. The Motley Fool has positions in and recommends Alphabet, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.

Berkshire Hathaway's (BRKA +1.63%)(BRKB +1.71%) B shares rose about 1.3% Monday morning, to about $502 as of this writing, while the market's chip complex went the other way.

Nvidia fell about 2%, down for a seventh session in a row. Advanced Micro Devices dropped about 3%, Broadcom about 2%, Intel about 3%, and Micron Technology about 5%.

That is every major chip stock down on a day the S&P 500 (^GSPC -0.28%) slipped only modestly, and the biggest conglomerate in the index up more than a percent.

A divergence this clean on one day can be noise. But this one has a logic to it, and I think the logic is worth understanding even if Monday doesn't repeat.

Image source: Getty Images.

A $360 billion pile of cash and Treasury billsBerkshire attracts money on days like this because of what it owns.

At the end of June, the conglomerate held about $35 billion in cash and about $325 billion in short-term U.S. Treasury bills in its insurance and other businesses -- about $360 billion combined. That money is not a bet on anything. It earns interest while it waits, and no sell-off in artificial intelligence (AI) infrastructure touches a dollar of it.

The operating businesses sit just as far from the build-out. Berkshire's earnings come from car insurance and reinsurance, a railroad, electric utilities, and dozens of manufacturers and retailers.

Second-quarter operating earnings rose 16% year over year to about $13 billion. The manufacturing, service, and retailing group grew 24%, Berkshire Hathaway Energy's earnings climbed 27%, and the BNSF railroad earned about $1.6 billion, up 6% year over year.

Insurance was the soft spot. Underwriting earnings fell 13% year over year, and insurance investment income slipped 9% to about $3.1 billion. None of those results depends on the price of a graphics processing unit.

Even the stock portfolio leans away from the theme.

Berkshire's biggest holdings are Apple, American Express, Alphabet, Coca-Cola, and Bank of America -- consumer and financial franchises, except for one. The Alphabet stake, worth about $37 billion after roughly $17 billion of buying in the second quarter, is Berkshire's one large bet adjacent to AI. The portfolio holds no chipmaker at all.

Earnings that don't need the boomOf course, Berkshire isn't immune to a market decline. In a real downturn, its railroad hauls less freight and its stocks fall with everyone else's.

The point is narrower. Berkshire's earnings power doesn't require the AI spending boom to continue. Monday, that independence was what investors paid for.

The nervousness has been building for a week. The iShares Semiconductor ETF fell 5.5% last week before Monday's drop, and Nvidia reports earnings Wednesday after the close. Gold, meanwhile, hit its highest level since May. Money is playing defense.

Berkshire has also been supporting its own stock. The company repurchased about $4.5 billion of its shares in the second quarter, a sharp step-up from the $235 million it spent on buybacks in the first. And Berkshire was a net buyer of about $20 billion of stocks during the quarter -- evidence the conglomerate still sees value in equities.

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Defensive day or rotation?So is Monday the start of something, or just a nervous session?

One day can't say. After all, Berkshire's B shares remain nearly 7% below their 52-week high of $537.74. The stock has hardly been the market's darling this year while AI growth stocks soared, and a single green Monday doesn't reverse that.

What can be said is what a buyer pays for the defensive qualities. At about $502, Berkshire's market value is about $1.1 trillion, which works out to about 21 times its annualized operating earnings. The reported price-to-earnings ratio is lower, at about 12, but that figure includes large investment gains that swing from quarter to quarter. On the steadier operating basis, Berkshire is arguably not the discount it was a few years ago.

Still, the stock offers something scarce right now, and Monday showed there's demand for it. Berkshire's earnings arrive either way, because premiums and freight don't wait on the AI build-out. And the $360 billion in cash and Treasury bills becomes more useful, not less, as other assets get cheaper.

At about 21 times operating earnings, none of that comes at a discount anymore. But on the first day in a while that investors seriously doubted the chip complex, Berkshire is what they bought. I don't think that is a coincidence.

President Donald Trump disclosed just over 1,000 financial transitions for the month of June in what appears to be broad reshuffling of his portfolio.

The president rotated in and out of stocks, bonds and exchange-traded funds throughout the month. The transactions totaled between $78.1 million and $263.1 million, according to Trump's latest filing on Aug. 22, which shows a range for each sale or purchase rather than an exact figure. His securities purchases topped $49 million, while his sales totaled at least $28.5 million.

While the filing gives a window into the investment moves made on behalf of Trump, it is not a clear picture of his total portfolio holdings. The amount bought or sold isn't specific, and there is no indication of how much Trump owns of any particular security.

Of the 1,051 transactions, the largest was the $5 million to $25 million sale of Vanguard Dividend Appreciation Index Fund ETF shares on June 22. That same day he bought between $1 million and $5 million of both Fidelity National Information Services and Home Depot. Those were the largest of several purchases of the stocks in June, although he also logged some sales of Fidelity as well.

Trump sold between $1 million and $5 million worth of shares of both Meta and Motorola on June 18, but snapped up the same range of shares in each of Berkshire Hathaway, Cintas, Visa and Mastercard that same day. Those moves came a day after the market sold off on concerns over the path of monetary policy. June 17 was the conclusion of Federal Reserve Chairman Kevin Warsh's first meeting. Stocks bounced back on June 18..

Other purchases in June include a number of ETFs, including the iShares U.S. Treasury Bond ETF, State Street Technology Select Sector SPDR ETF and the iShares GSCI Commodity Dynamic Roll Strategy ETF. Trump also purchased several municipal bonds.

The president's sales included the Vanguard Short-Term Bond Index Fund ETF, State Street Consumer Discretionary Select Sector SPDR ETF and the Vanguard FTSE Europe ETF.

Those ETF transitions spanned just over $1 million to $5 million. In total, there were 25 sales and purchases of stocks, bonds and ETFs in that range. The remaining transactions were broken down into different buckets $1 million and under. The filings only require Trump to disclose securities transactions over $1,000.

The president also moved in and out of defense contractor Palantir Technologies, buying between $1,001 and $15,000 on June 3. He sold between $15,001 and $50,000 on June 16 and another $500,001 and $1 million worth on June 18. The U.S. and Iran agreed to a peace deal on June 14. He bought a small amount again on June 23.

Two other defense companies, RTX and Northrop Grumman were also named in the president's disclosure. Trump bought between $100,001 and $250,000 worth of RTX shares on June 12, and sold between $1,001 and $15,000 of Northrop Grumman the same day. He then bought Northrop on June 23 and sold it again on June 24.

He also bought and sold Coinbase throughout the month amid Bitcoin's share decline. He offloaded between $116,003 and $315,000 worth of shares between June 12 and June 23, and then bought between $50,001 and $100,000 on June 24.

The White House did not immediately respond to a request for comment. In May, spokesman Davis Ingle told CNBC, after Trump's disclosure of his first-quarter transactions, that the president's assets are held in a trust managed by his children.

"There are no conflicts of interest," spokesman Davis Ingle said in the statement at the time. "President Trump only acts in the best interests of the American public — which is why they overwhelmingly re-elected him to this office, despite years of lies and false accusations against him and his businesses from the fake news media."

— CNBC's Kevin Breuninger and Dan Mangan contributed reporting.

Berkshire Hathaway's (BRKA +0.80%) (BRKB +0.74%) most recent 13F was just filed with the Securities and Exchange Commission, and the company made a notable move. During the second quarter, it increased the size of its bet on Alphabet (GOOGL -0.54%) (GOOG -0.50%), thanks to the $10 billion private placement in June and open market transactions.

Oracle of Omaha Warren Buffett, who is now chairman of Berkshire after retiring as CEO at the end of 2025, revealed that he initiated this position last year. Combined, the Class A and Class C shares make up the conglomerate's third-largest position, valued at $36.6 billion. It's now larger than the Coca-Cola stake.

Berkshire and Buffett have made it crystal clear just how bullish they have become on Alphabet, whose share price has surged 70% over the past 12 months. Alphabet is one of the major hyperscalers in artificial intelligence (AI).

Image source: The Motley Fool.

Alphabet passes the test Notably, Buffett led the decision to buy Alphabet during the third quarter last year, although he did discuss the move with now-CEO Greg Abel. Buffett's philosophy has seen him shy away from internet enterprises in the past. This is no longer the case, of course. It's even more interesting that the Alphabet position was started during the ongoing AI revolution.

Berkshire must be optimistic about Alphabet's prospects over the coming five years and beyond. This is easy to believe, given that the business possesses a wide economic moat. There are network effects at play for Google Search and YouTube. Google Cloud has a notable scale advantage, and its customers face switching costs. And valuable intangible assets, such as the Google brand name and the company's ability to collect and leverage data, bolster its competitive position.

Abel must also favor Alphabet's position in the ongoing AI data center boom. Investors are already familiar with Alphabet's capital expenditure (capex) surge, as it now plans to spend $200 billion (at the midpoint) in 2026, with a higher outlay next year. The hyperscalers are sparing no expense to build AI infrastructure.

Rising capex has officially resulted in negative free cash flow (FCF), to the tune of a $5.9 billion loss in the second quarter. It might not be long until sell-side analysts update their spreadsheets to forecast that Alphabet will post negative FCF for the full year.

Alphabet is a wildly profitable company on the income statement, despite the massive hit to its FCF. Its operating margin over the first six months of 2026 was a superb 35%. And its balance sheet has $242 billion in cash, cash equivalents, and marketable securities.

Buffett wouldn't have made a sizable capital outlay if he didn't appreciate Alphabet's financial position. This tells me that Berkshire's investment team believes it can accurately predict Alphabet's FCF well into the future. Buffett and Abel must have concluded that the multi-hundred-billion-dollar capex plan will generate a satisfactory return on invested capital.

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This AI stock has gotten cheaper Over the past year, Alphabet shares have soared 70%. After a fantastic gain like that, investors are forgiven for assuming the stock is expensive now. This isn't the case, though. You'd be surprised to learn that the valuation has become cheaper. The AI stock trades at a price-to-earnings (P/E) ratio of 17.4 today. This multiple has declined by 20% in the last 12 months.

One of Warren Buffett's core investing guidelines is never to overpay for any company. Buying at an attractive valuation is preferred. Alphabet shares are at a P/E ratio that's 34% below the S&P 500's multiple.

Berkshire Hathaway will file its next 13F in about three months. When this happens, the world might find out that it further added to its Alphabet stake in the current quarter. The conglomerate certainly has enough cash on hand to do so.

Warren Buffett may have stepped down as CEO in January, but Berkshire Hathaway has dramatically increased its bet on a stock that he began.

Berkshire Hathaway Inc. delivered a strong Q2, highlighted by robust operating business growth and disciplined capital allocation under Greg Abel. Manufacturing revenues rose 15.2% with 25.8% pre-tax earnings growth, driven by both organic and inorganic gains, notably in Precision Castparts and OxyChem. Capital allocation is more active: significant Alphabet purchases, Taylor Morrison acquisition, and $4.5B in share buybacks, all executed with value discipline.

Berkshire Hathaway (NYSE:BRK)(NYSE:BRK) is no longer run by Warren Buffett, with the legendary investor stepping down as CEO at the end of 2025. While Buffett is still chairman and active with the company, the control is now in the hands of CEO Greg Abel.

On Friday, Berkshire Hathaway revealed their latest portfolio moves in a 13F filing, the second filing under Abel’s leadership.

New PositionsBerkshire Hathaway unveiled a new position in one stock in the second quarter, which ended June 30, 2026. Here’s a look at the changes to the portfolio compared to first quarter.

Added D.R. Horton Inc (NYSE:DHI): 3,564 shares Berkshire Hathaway previously owned shares of the homebuilder in 2025 before exiting after a short hold on the stock.

Exited PositionsBerkshire Hathaway exited one stock in the quarter, selling out of Constellation Brands (NYSE:STZ) completely.

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Portfolio ChangesThe second-quarter 13F showed changes in the existing stocks held by Berkshire Hathaway. Here are the top decreased stakes by Berkshire Hathaway in the second quarter by percentage, as reported by 13f.info.

Capital One Financial (NYSE:COF): -58% Nucor (NYSE:NUE): -52% Kroger (NYSE:KR): -22% Ally Financial (NYSE:ALLY): -7% Bank of America (NYSE:BAC): -6% DaVita (NYSE:DVA): -4% Here are the top additions in the second quarter by percentage:

Alphabet Class C (NASDAQ:GOOG): +658% Macy’s Inc (NYSE:M): +142% Alphabet Class A (NASDAQ:GOOGL): +45% Delta Air Lines (NYSE:DAL): +44% Lennar Corp (NYSE:LEN): +30% Lennar Corp B (NYSE:LEN): +25% New York Times (NYSE:NYT): +4% Alphabet Class A, Delta Air Lines and Macy’s were all new purchases in the first quarter and all saw significant increases in the second quarter. The New York Times was a new stake late in 2025 that has increased in size in recent quarters.

Top HoldingsAt the end of the second quarter, these were the largest stock holdings in the Berkshire Hathaway portfolio and their valuation at the time:

Apple Inc (NASDAQ:AAPL): $66.0 billion American Express Company (NYSE:AXP): $51.3 billion Coca-Cola (NYSE:KO): $32.5 billion Alphabet Inc Class A: $28.2 billion Bank of America: $27.5 billion Chevron Corporation (NYSE:CVX): $14.0 billion Occidental Petroleum (NYSE:OXY): $12.9 billion Chubb Limited (NYSE:CB): $11.7 billion Moody’s Corp (NYSE:MCO): $11.2 billion Alphabet Inc Class C: $9.6 billion The top three positions stay the same from the end of the first quarter with Alphabet Class A moving up from eighth place to fourth place. Alphabet Class C enters the top 10 at 10th place.

Taken together, the two Alphabet stakes would equal $37.8 billion and place the company as a top three holding.

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Key Takeaways Progressive has the edge over Berkshire Hathaway on price gains, analyst sentiment and return on equity.Berkshire Hathaway holds over $370B in cash and Treasuries, supporting investments and acquisitions.Progressive uses pricing, digital tools, AI and bundled policies to support growth, retention and margins.
Prudent pricing, increasing climate-related risks and rapid digital transformation are likely to influence the insurance industry’s outlook in 2026. Although insurers remain exposed to catastrophe losses, driven by climate change, stronger pricing continues to support profitability. Global commercial insurance rates are expected to have moderated, largely due to abundant capacity and heightened competition among insurers.

The Fed has kept interest rates unchanged so far in 2026 and has hinted at the possibility of a cut later this year.  Despite this environment, industry giants Berkshire Hathaway Inc. (BRK.B - Free Report) and The Progressive Corporation (PGR - Free Report) are expected to remain resilient.

At the same time, increasing adoption of digital technologies is likely to drive a rise in merger and acquisition (M&A) activity, particularly in tech-focused deals, as highlighted by Willis Towers Watson’s Quarterly Deal Performance Monitor. Against this backdrop, which of these stocks presents a more compelling opportunity for long-term investors focused on the insurance sector? Let’s take a closer look at their fundamentals.

Factors to Consider for BRK.BBerkshire Hathaway is a broadly diversified conglomerate operating more than 90 businesses across insurance, energy, railroads, manufacturing, retail and consumer products. This extensive business mix limits dependence on any single industry, supporting stable earnings and resilience across economic cycles.

Insurance remains Berkshire’s largest business, generating approximately one-fourth of total revenues. The segment benefits from disciplined underwriting, consistent premium growth and favorable pricing. A key competitive strength is Berkshire’s substantial insurance float—premiums collected before claims are paid—which provides low-cost capital for investments and acquisitions. This funding advantage has played a central role in the company’s long-term value creation and capital-allocation flexibility.

Apart from insurance, Berkshire continues to refine its investment portfolio to enhance income stability and broaden geographic diversification. The company has expanded its holdings in Japanese trading houses and airline-related investments while reducing exposure to selected payment companies. Its planned $6.8 billion acquisition of Taylor Morrison Home Corp. also reflects confidence in the long-term prospects of the U.S. housing market.

Berkshire’s financial position remains exceptionally strong. With more than $370 billion in cash and U.S. Treasury holdings, conservative leverage and a fortress balance sheet, the company is well equipped to pursue strategic investments, capitalize on acquisition opportunities and withstand economic uncertainty.

Berkshire’s return on equity of 6.6% lags the industry average of 7.8%, but the company has improved its returns over time. BRK.B shares have gained 1.9% in the past six months.

Factors to Consider for PGRPGR is one of the country’s largest auto insurance groups. It benefits from a broad product portfolio and disciplined underwriting approach, which support strong policy retention and consistent premium growth. Its focus on maintaining healthy policies in force and improving retention has increased policy life expectancy across business lines. This progress reflects differentiated auto insurance products, competitive pricing and strong customer service, which foster deeper, longer-lasting relationships.

Bundled offerings, particularly auto and home policies, remain central to Progressive’s growth strategy by strengthening customer engagement and retention economics. The company is also carefully managing property exposure in loss-prone regions while expanding customer segmentation through targeted product launches. Greater mobile app adoption and wider product availability across states are further enhancing distribution and supporting market-share gains.

Progressive’s leadership in Personal Auto continues to drive long-term growth. Recent rate increases, higher new-business applications and increased advertising have strengthened premium growth and brand visibility. Non-rate initiatives also support expansion, while the company’s extensive independent-agent network remains important for customer acquisition and retention. Together, these efforts are improving premium volumes and underwriting margins.

Technology is another key competitive advantage. Investments in digital capabilities, data analytics and artificial intelligence are improving operational efficiency, underwriting precision and customer service. These tools enable more accurate pricing, faster claims processing and a better overall customer experience.

Backed by strong operating cash flows, Progressive continues to invest in margin-enhancing and growth-oriented initiatives. The company has steadily increased book value and reduced leverage, although its leverage ratio remains above industry averages. Nevertheless, a strong times-interest-earned ratio demonstrates its ability to service debt and maintain financial flexibility.

Its return on equity of 32.92% is better than the industry average. PGR shares have gained 2.1% in the past six months.

Estimates for BRK.B and PGRThe Zacks Consensus Estimate for BRK.B’s 2026 revenues implies a year-over-year increase of 3.8%, while that for EPS implies a year-over-year decrease of 2%.  EPS estimates have moved 0.8% north over the past 30 days. 

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for PGR’s  2026 revenues implies a year-over-year increase of 6%, while that for EPS implies a year-over-year decrease of 3.7%.  EPS estimates have moved 1.6% north over the past 30 days. 

Image Source: Zacks Investment Research

Are BRK.B and PGR Shares Expensive?Berkshire is trading at a price-to-book multiple of 1.5, above its median of 1.46 over the last five years. PGR’s price-to-book multiple sits at 3.54, lower than its median of 4.8 over the last five years.

Image Source: Zacks Investment Research

ConclusionHolding shares of Berkshire Hathaway adds dynamism to shareholders’ portfolios. It is a diversified operating conglomerate supported by durable cash flows, financial strength and a proven reinvestment framework that has compounded shareholder wealth over decades. Investors are keen to see how the conglomerate fares under the leadership of the new CEO.

 Progressive remains focused on improving the customer experience through enhanced services, supporting policy growth by strengthening retention and attracting new customers. Its market leadership, competitive pricing and disciplined underwriting position the company well for continued growth. A VGM Score of B instills confidence.

Price appreciation, analysts' sentiment and return on equity clearly show that PGR has an edge over BRK.B.

Both BRK.B and PGR carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CFO Charles Chang purchased two Class A shares for $1.5 million. Michael O'Sullivan, the general counsel bought 488 Class B shares for a $250,000.

Given that the stock's only a tad below analysts' consensus price target of $525.08 following the recent release of its second-quarter results, Berkshire Hathaway's (BRKA -0.42%) (BRKB -0.47%) Class B shares appear to be fully and fairly valued. And maybe they are.

Dig deeper, though. There may be something the analyst community isn't fully appreciating. And it's not the fact that CEO Greg Abel is finally starting to do something with all that idle cash the company's been sitting on, either. It's how well its biggest cash cow is now doing.

Berkshire's breadwinner is now firmly growing It's easy to forget that Berkshire Hathaway isn't just a basket of hand-picked stocks. It's also a collection of privately held, cash-generating businesses like Duracell batteries, Pilot Travel Centers, Clayton Homes, Shaw flooring, and Dairy Queen, just to name a few. This is where most of the conglomerate's quarterly cash flow comes from, in fact, which of course is eventually invested for growth (one way or another). These businesses collectively contributed $11.7 billion worth of after-tax earnings in Q2 of this year, despite headwinds on the insurance front.

Image source: Getty Images.

Still, the grouping that includes Berkshire's manufacturing, retailing, and services ventures like Precision Castparts, Lubrizol, International Metalworking, Clayton Homes, and others performed phenomenally well last quarter, turning $61.5 billion worth of revenue into net earnings of nearly $4.5 billion. Those numbers are up 15.2% and 24.1%, respectively, accelerating Q1's already healthy growth pace.

Indeed, as the graphic below illustrates, last quarter's profit growth of the conglomerate's manufacturing, services, and retailing arm extends and accelerates long-standing forward progress that hasn't necessarily been mirrored by all of Berkshire's other businesses, or, for that matter, every business that's not part of the Berkshire Hathaway family.

Data source: Berkshire Hathaway. Chart by author. Figures are in millions of dollars.

It matters simply because -- as the chart above also illustrates -- manufacturing, services, and retailing are now collectively Berkshire Hathaway's single-biggest and most consistent cash cow, accounting for nearly 40% of the company's spendable cash flow. Remember, Berkshire's investment gains don't become liquid cash until and unless those positions are sold.

Potential not fully reflected in the target price One quarter doesn't necessarily start a new trend. All long-lived trends, however, start out with that first good quarter. And given the nature of most of this arm's businesses -- manufacturing -- strength on this front against the backdrop of a lethargic economy is encouraging to be sure. It says that what these businesses are making is in demand even if the economy remains hampered by slow growth, lingering inflation, and an uptick in job losses. In that sort of environment, reliable cash flow has a funny way of suddenly becoming very important.

More to the point for interested investors, many of the analysts who are conservatively pricing this stock based on the company's still-limited interest in putting more of its cash hoard (now roughly $360 billion) to work may not be pricing in the full potential of these privately held ventures. This, of course, bolsters the already bullish case for buying a stake in Berkshire Hathaway here.

OLDWICK, N.J.--(BUSINESS WIRE)-- #insurance--AM Best has revised the outlooks to stable from negative and affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings of “aa-” (Superior) of WestGUARD Insurance Company, AmGUARD Insurance Company, EastGUARD Insurance Company, NorGUARD Insurance Company and AZGUARD Insurance Company, which operate under an intercompany pooling agreement. These companies are members of Berkshire Hathaway GUARD Insurance Companies (GUARD) and d.

Warren Buffett led Berkshire Hathaway (NYSE:BRK)(NYSE:BRK) for decades. The first quarter without Buffett as CEO saw successor Greg Abel make major changes and take three new positions. Those new stakes are doing quite well.

Greg Abel’s Q1 Bets Pay OffIn the first quarter, Abel took three new stakes, along with cutting many positions completely and lowering the size of other stakes in the investment portfolio.

The three new stocks added in the first quarter were:

Alphabet Class C (NASDAQ:GOOG): 3,585,215 shares Macy’s Inc (NYSE:M): 3,038,355 shares Delta Air Lines (NYSE:DAL): 39,809,456 shares Here’s a look at how much those stakes are worth and how much they’ve gained since the end of the first quarter based on closing prices on March 31, 2026 and the prices on Aug. 11, 2026:

GOOG: $1,233,062,994.95, up $205,217,706.60 M: $74,743,533.00, up $20,205,060.75 DAL: $3,606,736,713.60, up $973,739,293.76 In total, the three positions are up nearly $1.2 billion in less than five months from the end of the first quarter.

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What’s Next for Berkshire HathawayThe conglomerate recently reported second-quarter financial results with net earnings more than doubling.

The quarterly report unveiled a bigger bet on Alphabet, an acquisition, and putting some of the large cash pile to work.

This means investors may be anticipating the company’s second-quarter 13F even more than they were. That filing is due on Friday and will show if Abel and company made any new investments in the second quarter, added to existing stakes, decreased sizes of existing stakes and/or exited any positions completely.

Based on the quarterly results, the investment portfolio either added to positions, bought new stakes, or a combination of both. It’s possible that positions were also decreased or cut, based on the first-quarter filing that showed major shake-ups for long-held positions.

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During his last few years at the helm of conglomerate Berkshire Hathaway (BRKA +1.76%) (BRKB +1.46%), Warren Buffett took a very conservative view of stocks. While he maintained that equities were still the best way to invest for the long term, he sold a lot more stocks than he bought, significantly cutting stakes in the company's top holdings, including Apple and Bank of America.

Between late 2022 and the end of the first quarter of this year, Berkshire was a net seller of stocks for 14 straight quarters. At the same time, Berkshire also stopped buying back its own stock, doing no share repurchases for more than a year and a half, from June 2024 until March 2026. The combination of net stock sales, solid cash flow generation, and a lack of buybacks led Berkshire to accumulate a huge stockpile of cash near $400 billion at the end of Q1.

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Putting cash to work However, with Buffett officially retiring at the end of 2025, new Chief Executive Officer Greg Abel has begun to deploy the company's cash. He restarted the company's buyback program in early March, repurchasing $235 million worth of shares in Q1. That continued in Q2, with $4.5 billion in share repurchases.

On top of that, for Q2, Berkshire was a net buyer of stocks for the first time in more than three years. The conglomerate made nearly $20 billion in net purchases in the quarter, headlined by a $10 billion private placement investment in Alphabet to help the cloud computing giant build out its artificial intelligence (AI) infrastructure. While big tech investments haven't been typical for Buffett, he has come out and said that Berkshire's initial investment in the search behemoth in Q4 2025 was at his behest and in consultation with Abel. Alphabet is now one of Berkshire's top five equity holdings, along with Apple, American Express, Coca-Cola, and Bank of America.

During the quarter, the company also closed on its acquisition of homebuilder Taylor Morrison. Berkshire has a pretty strong presence in the U.S, housing market, also owning manufactured-home builder Clayton Homes, several building products companies, and residential real estate brokerage franchise network Berkshire Hathaway HomeServices. It was the first deal made under Abel, whom Buffett has praised for his deal-making skills.

Image source: The Motely Fool

All these moves reduced Berkshire's cash hoard from a record $497.4 billion at the end of Q1 to $365.5 billion at the end of June. However, it still gives Abel more than enough dry powder to continue to invest in equities, buy back Berkshire stocks, and make large deals.

Berkshire's Q2 earnings report shows that the company's operating earnings climbed 16%, from $11.2 billion a year ago to almost $13 billion. The growth was led by its manufacturing, service, and retailing segment, which saw growth soar 24% to $4.5 billion, and Berkshire Hathaway Energy, where profit surged 27% to $891 million . Profit at BNSF, its railway segment, meanwhile, rose 6% to $1.6 billion.

The company's insurance segment saw some pressure, with underwriting profits sinking 13% from almost $2 billion a year earlier to $1.73 billion. Insurance investment income, meanwhile, fell by 9% to $3.06 billion. Berkshire's insurance segment can be lumpy quarter to quarter depending on when claims come in, but its enormous float -- money collected from policy holders before claims are paid -- provides the company with a steady, zero-cost pool of capital to help fund its investment portfolio.

It's good to see Berkshire finally using some of its cash instead of sitting on it. The stock dropped to one of its lowest price-to-tangible book value in several years, at 1.85, so the return of buybacks makes sense and isn't just something Abel decided to do arbitrarily. At the same time, while the market has performed well, there are certainly some pockets where value can be found.

Given an improved valuation and Berkshire and Abel having plenty of cash for work with, now looks like a good time to buy the stock for the long haul.

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Greg Abel might not be as patient as Warren Buffett, Michael Burry says. Theron Mohamed/Business Insider Is the wait finally over at Berkshire Hathaway?

Warren Buffett spent much of his last decade as CEO hoarding phenomenal amounts of cash, as he waited for stocks, acquisitions, and even buybacks to become cheap enough to satisfy his hunger for bargains.

Greg Abel, who succeeded the legendary investor at the turn of the year, might not have quite so much patience, based on Berkshire's second-quarter earnings report on Saturday.

Michael Burry, the value investor of "The Big Short" fame and a longtime Buffett disciple, said in a Substack note on Sunday that his "biggest fear" for Berkshire was that Buffett's successor couldn't resist swinging before the "fat pitch" arrives.

"I believe this fear has come true," Burry wrote, adding that while only a little of Berkshire's cash hoard has been spent, "these first steps look to be more framing moves than investment moves."

Burry's worry appears to be that Abel is deploying Berkshire's cash not based on fundamentals, but because he wants to reassure shareholders that he's the right man for the job and Berkshire is on the right track.

Abel and Burry didn't immediately respond to requests for comment from Business Insider.

Cash is flowing outBerkshire's earnings revealed that its cash pile shrank from a record $380 billion to $365 billion in the three months ended June 30.

A key driver was Berkshire spending a net $20 billion on stocks, investing $23.5 billion while selling only $3.7 billion. It had been a net seller of stocks for 14 consecutive quarters, and the last time it spent this much on stocks was in the first quarter of 2022.

Abel also repurchased $4.6 billion of Berkshire stock, marking the company's largest quarterly buyback since 2021. Buffett refrained from any repurchases during his last six quarters as CEO.

Moreover, Berkshire spent another $3.4 billion or so on buybacks between July 1 and July 29, based on its average stock price and how much its share count declined during that period. That puts it on track for another busy quarter for buybacks, despite Berkshire stock marching to all-time highs in recent days.

Abel has also been active on the deal front this year. Berkshire closed its takeover of OxyChem for roughly $9.4 billion in cash on January 2 and its acquisition of Taylor Morrison for $6.8 billion in cash on July 24.

Berkshire once again being a net buyer of stocks, ramping up its buybacks to multi-year highs, and closing a couple of sizable acquisitions is notable. But it doesn't necessarily mean Abel has kicked the company into high gear.

Buffett kept busy

Warren Buffett was behind Berkshire's purchase of Alphabet stock last year.  Mark Wilson/Getty Images For one, Buffett told CNBC in July that he "initiated" the purchase of Alphabet stock last year. That could mean he's also responsible for Berkshire purchasing another $10 billion of Alphabet stock in a private placement in June, at around a 6% discount to the market price.

Following the purchase, Berkshire holds a roughly $29 billion stake in the Big Tech titan and key player in the AI boom, assuming it hasn't altered its position. It listed Alphabet as one of the top five holdings in its stock portfolio at the end of June.

Buffett was also CEO when the OxyChem deal was struck last year, and he's made other acquisitions in recent years, including Alleghany and Pilot.

Meanwhile, Abel has pledged to follow Buffett's strategy of disciplined capital allocation, and indicated that he consults with Buffett — who remains Berkshire's chairman — on every major decision.

It's safe to assume that Buffett, who turns 96 on August 30, will continue to have a strong influence on Berkshire while he's still alive.

After all, he transformed it from a failing textile mill into a $1 trillion conglomerate over six decades. He did so by acquiring businesses such as Geico and BNSF Railway, and building huge stakes in companies such as Apple, Coca-Cola, and American Express.

Berkshire still had a larger cash pile at the end of June than it did a year earlier, showing that Abel only made a small dent in the money mountain.

Without the $10 billion Alphabet deal, Berkshire's stock purchases would have been less than in the first quarter, suggesting that Abel wasn't scooping up stocks left and right last quarter.

On the other hand, Berkshire sold an unusually large $24 billion of stocks in the first quarter as it was offloading Todd Combs' positions after he departed his role as one of Buffett's two investment managers.

It might have been a net buyer of stocks that quarter in the absence of those disposals, which would have made last quarter seem like less of a sea change.

Abel is starting to make his mark, but he'll have to deploy a whole lot more cash to move the needle at Berkshire.

It remains an open question whether he's forging a different path than Buffett, and whether Burry is right that he's less patient and more pandering than his predecessor.

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Theron Mohamed You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.

Theron Mohamed is a London-based correspondent on the Trending team at Business Insider. His coverage spans finance, investing, wealth, markets, and the economy.Theron joined BI in 2019 as a reporter at Markets Insider and rose to the rank of correspondent before moving to the Trending team in 2024. He previously covered tech, media, and telecom stocks for Investors Chronicle magazine and had a brief stint on the Financial Times' Data team. He interned at the Wall Street Journal in New York where he primarily wrote for Heard on the Street.Theron has freelanced for The Independent, The Telegraph, WIRED, and several smaller publications. He holds an undergraduate degree in geography from the London School of Economics, and a master's degree in journalism from Columbia University.Theron often covers Warren Buffett, Michael Burry, Jeremy Grantham and other top-flight investors. He also writes about the world's wealthiest people and shares financial advice from all manner of rich and successful people.Email Theron at [email protected] and follow him on X @theron_mohamed.Expertise

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