Berkshire Hathaway Sets Records as Investors Favor Abel

Berkshire Hathaway shares have recovered from a prolonged decline following Warren Buffett's leadership transition, reaching new record closing prices in October 2026 as semiconductor stocks weakened. The rally has strengthened the company's position as investors reassess Greg Abel's leadership and shift attention from technology-driven momentum toward businesses with substantial cash reserves and diversified earnings.

According to CNBC, Berkshire's Class A shares closed at $820,500 on Thursday, while Class B shares finished at $546.97, both setting closing records. Friday's prices fell almost 1%, but remained approximately one-half of a percentage point above their levels immediately before Buffett announced his planned departure as chief executive in May 2025.

Yahoo Finance reported that Berkshire's Class B shares reached a record close on Tuesday, October 20, their first since May 2, 2025. The Class A shares also reached an intraday record on Wednesday. Over a three-week period, Berkshire gained 7% while semiconductor stocks lost 15%, despite the S&P 500 advancing more than 35% during the preceding 17 months.

The recovery followed a difficult period after Buffett announced that Abel would succeed him as chief executive. On May 5, 2025, Class A shares dropped 4.9% and Class B shares declined 5.1%. CNBC cited a 14% decrease in first-quarter operating earnings, announced during the shareholders' meeting, as a possible contributor to the selloff.

Brian Meredith of UBS offered reassurance about the leadership transition, predicting that Berkshire's corporate culture and strategy would remain unchanged.

"remain unchanged" was the phrase Meredith used to describe the expected continuity of Berkshire's culture and strategy under Abel.

Meredith also highlighted the company's reduced dependence on Buffett's individual investment decisions and the strength of its operating businesses.

"Buffett leaves a company that is less reliant on his investing capabilities, with an array of leading businesses with strong cash flows."

Investors initially remained unconvinced. At their lowest closing prices of the year, approximately three months after the announcement, Class A shares had fallen 14.3%, while Class B shares had lost nearly 15%. Both classes subsequently rallied 18%, recovering their previous losses and establishing fresh records.

CNBC reported that Berkshire's Class B shares had climbed almost 9% since October began, outperforming a 0.4% decline in the S&P 500 and a 4.8% drop in the equal-weight NYSE Fang+ index. The comparison reflects a broader market shift away from major technology companies, including Meta, NVIDIA and Alphabet.

A Barron's headline described Berkshire as "the ultimate anti-AI play," pointing to its substantial financial reserves and diversified earnings. The publication highlighted the company's defensive characteristics amid market volatility.

"With more than $350 billion in cash and equivalents on its balance sheet and close to $50 billion of annual after-tax earnings from a diverse group of businesses, Berkshire arguably is the most defensive megacap stock in the market."

Adam Patti of VistaShares, which operates an exchange-traded fund tracking Berkshire's portfolio, discussed the market's changing preferences on CNBC's Morning Call. He said the shift away from speculative momentum had improved sentiment toward Berkshire.

"The market spent a year pricing Berkshire without Buffett. I think it's finally decided Abel can, in fact, run it"

Patti also described Berkshire's potential response to changing market conditions in terms of its financial flexibility.

"Berkshire is a coiled spring. When it comes back, it comes back fast and furious."

Abel's approach to capital allocation has also attracted attention. According to Yahoo Finance, Berkshire repurchased approximately $4.5 billion of its own shares during the second quarter, ending 14 consecutive quarters of net stock selling. Its cash holdings also declined from a record $397 billion.

Although Berkshire has been treated as an alternative to the semiconductor trade, its business remains connected to artificial intelligence infrastructure. Abel has identified electricity demand from expanding data centers as an opportunity for Berkshire Hathaway Energy, provided the company can pursue that business without increasing costs for its other customers.

"significant opportunity for Berkshire and Berkshire Hathaway Energy"

The October rally has also produced an unusual divergence between Berkshire and semiconductor shares. From October 6 through October 20, the iShares Semiconductor ETF declined in 10 of 11 trading sessions, while Berkshire rose on nine days. Berkshire also recorded two of its strongest gains during the semiconductor sector's worst sessions on October 14 and October 16.

Yahoo Finance calculated that Berkshire outperformed the PHLX Semiconductor Index by 22 percentage points across the 12-session period ending October 20, the widest gap over such a stretch since early 2010. The combination of semiconductor losses of at least 14% and Berkshire gains of at least 7% had last occurred on October 3, 2001.

Historical comparisons offer no definitive prediction. In five of six earlier instances, semiconductor stocks were higher a week later, while the sector declined over the following year in five cases. The S&P 500 also fell within a year in four of those instances, although four cases occurred during the same bear market.

Buffett's transition also revived discussion of investment opportunities Berkshire had failed to pursue. During an earlier shareholders' meeting, an audience member asked Charlie Munger about his most recent business mistake.

"most recent business mistake that you've made, Mr. Munger, and why did it occur?"

Buffett responded humorously before Munger explained why missed investments could have greater consequences than losses visible in financial statements.

"I'm going to take notes on this one."

Munger said Berkshire's most costly mistakes often involved opportunities the company understood but declined to pursue.

"mistakes of omission. They don't show up in our figures. They show up in opportunity costs.

In other words, we have opportunities, we almost do it. In retrospect, we can tell that we were very much mistaken not to do it. In terms of the shareholders, those are the ones in our history that it really cost the most.

And very few managements do much thinking or talking about opportunity costs."

Buffett acknowledged the financial scale of those missed opportunities.

"Billions and billions and billions. I might as well say it."

Munger agreed that the company continued to make such mistakes, while Buffett joked that Berkshire might be improving.

"Right, right. And we keep doing it."

Buffett's response prompted another observation from Munger about whether their record had improved.

"Some might say we're getting better at it."

Munger explained that he avoided naming specific companies because Berkshire might eventually have an opportunity to acquire them at an acceptable price. He emphasized that the costliest errors involved opportunities that management understood but failed to pursue.

"I don't like mentioning the specific companies, because the — you know, we may, in due course, want to buy them again and have an opportunity to do so at our price. But practically everywhere in life, and in corporate life, too, what really costs, in comparison with what easily might have been, are the blown opportunities. I mean, it just — it's an awesome amount of money..."

Buffett distinguished those missed opportunities from investments outside Berkshire's expertise. He said the company considered an omission a genuine mistake when its managers understood the business but failed to act decisively.

"I might add that when we speak of errors of omission, of which we've had plenty, and some very big ones, we don't mean not buying some stock where we — a friend runs it, or we know the name and it went from one to 100. That doesn't mean anything. It's only — We only regard errors as being things that are within our circle of competence.

So if somebody knows how to make money in cocoa beans, or they know how to make money in a software company or anything, and we miss that, that is not an error, as far as we're concerned. What's an error is when it's something we understand, and we stand there and stare at it, and we don't do anything. Or worse yet, what really gets me is when we do something very small with it.

We do an eyedropper's worth of it, when we could do it very big. Charlie refers to that elegantly when I do that sort of thing as when I'm sucking my thumb."

Buffett separately announced on September 18 that he would step down as Berkshire's chairman. According to Yahoo Finance, the shares reached their bottom approximately two weeks later before beginning the recovery that culminated in October's records.

Berkshire's next major financial milestone is its third-quarter earnings report, which Yahoo Finance expected the company to release on Saturday, November 7, 2026.