Berkshire Hathaway delivered robust operating performance in the second quarter, with net profit doubling as investment gains took center stage. The company's net stock purchases for the quarter totaled approximately $19.8 billion, including about $10 billion spent on acquiring Alphabet common stock, while roughly $4.5 billion was allocated to buy back its own shares.
On August 8, Berkshire's latest financial report showed that, driven by a significant rebound in unrealized gains from its stock portfolio, second-quarter GAAP net profit nearly doubled year-over-year to $25.667 billion, up about 107% from $12.37 billion in the same period last year. First-half net profit reached $35.773 billion, rising approximately 111% from a year earlier.
Meanwhile, the company repurchased about $4.5 billion of its own stock in the second quarter, delivering the largest quarterly shareholder return since 2021, far exceeding the $235 million spent in the first quarter. Total buybacks for the first half amounted to roughly $4.8 billion.
Additionally, Berkshire's net stock purchases in the second quarter totaled about $19.8 billion, including approximately $10 billion for Alphabet common stock, marking the official entry of Google into its top five holdings. Previously, Abel personally participated in anchoring Alphabet's $85 billion financing project, followed by the disclosure of Berkshire's position in Alphabet, with the timing indicating a swift pace in executing large-scale transactions.
On the cash front, the financial report showed that as of June 30, Berkshire's insurance and other businesses held approximately $359.2 billion in cash, cash equivalents, and U.S. Treasury bills (net of unsettled purchases), a notable decline from the end of 2025.
Key drivers behind the net profit doubling: Investment gains and multi-segment operating profit growth
The sharp increase in second-quarter net profit was primarily driven by investment gains. After-tax investment income for the quarter was $12.684 billion, including an increase of about $10.9 billion in unrealized gains from the stock portfolio and roughly $1.8 billion in realized after-tax gains.
In contrast, the second quarter of 2025 was significantly impacted by a $3.76 billion impairment loss on its investment in Kraft Heinz, which weighed on net profit.
The financial report revealed that the book value of the Kraft Heinz equity investment was $8.76 billion, exceeding the market value of $7.692 billion. Although the book value surpasses fair value by about $1.1 billion (12.2%), management assessed that the impairment conditions were not yet met and decided not to recognize a loss.
The report also showed that second-quarter operating profit reached $12.983 billion, up about 16% from $11.16 billion in the same period last year. First-half operating profit totaled $24.329 billion, increasing approximately 17% year-over-year.
By business segment, the manufacturing, service, and retail sector performed best in the second quarter, with operating profit of $4.47 billion, up about 24% from $3.601 billion a year earlier. The first-half total was $7.669 billion, rising about 15% year-over-year.
The railroad business BNSF contributed $1.558 billion in operating profit in the second quarter, up about 6% year-over-year (with a 9.5% increase in the first half).
Berkshire Hathaway Energy's second-quarter profit was $891 million, up about 27% from $702 million in the prior year.
In contrast to the robust performance of physical businesses, Berkshire's traditional strength—insurance—experienced clear divergence and cooling. Insurance underwriting profit in the second quarter was $1.731 billion, down from $1.992 billion a year earlier. Insurance investment income was $3.059 billion, also narrowing, declining about 9% from $3.367 billion in the same period last year (down 8.3% year-over-year in the first half).
Notably, the "other" category posted strong results, contributing $1.274 billion in the second quarter, compared to just $32 million in the prior year. The company attributed this change primarily to a significant improvement in foreign exchange gains and losses—second-quarter foreign exchange gains on non-U.S. dollar-denominated debt were $326 million, and $575 million in the first half, compared to foreign exchange losses of $877 million and $1.59 billion in the same periods of 2025, respectively.
Behind the cash reduction: $4.5 billion in buybacks, return to net stock buyer, two major acquisitions
The financial report showed that Berkshire spent $4.527 billion on share repurchases in the second quarter, compared to just about $235 million in the first quarter. Total buybacks in the first half were approximately $4.76 billion, with the vast majority concentrated in the second quarter.
On a monthly basis, there were no repurchases in April, positions were built in May, and activity accelerated significantly in June. In June alone, the company repurchased about 7.14 million Class B shares at an average price of approximately $487.98, and 413 Class A shares at an average price of about $733,800.
If the large-scale buybacks were already attention-grabbing, the following figures carry even deeper implications for capital allocation. The financial report indicated that in the first half of 2026, Berkshire purchased $39.405 billion in stocks and sold $27.78 billion, resulting in net purchases of about $11.625 billion. In the same period of 2025, Berkshire was a net seller of about $4.5 billion.
In other words, Berkshire has shifted from a model of reducing positions and accumulating cash over the past several years to a net buyer in the public market.
Looking at portfolio changes, Alphabet (Google's parent company) has officially entered the top five stock holdings, joining American Express, Apple, Bank of America, and Coca-Cola. These five heavyweight stocks collectively account for 66% of the stock portfolio.
Financial data revealed that the cost basis for "commercial, industrial, and other" category stocks surged from about $58 billion at the start of the year to $82.1 billion, an increase of over $24 billion in six months, while holdings grew sharply to $128.816 billion, reflecting significant active buying in the second quarter—net purchases of equity securities in the first half totaled about $11.7 billion.
As of June 30, the fair value of Berkshire's equity investments reached $323.779 billion, up $26 billion from $297.778 billion at the start of the year. The cost basis was only $106.521 billion, resulting in paper gains of $217.258 billion.
Beyond stock purchases and buybacks, two substantial physical acquisitions in the first half of 2026 further reduced the cash pile. The first: On January 2, Berkshire completed the acquisition of Occidental Petroleum's chemical business, OxyChem, for about $9.4 billion. OxyChem is a global manufacturer of basic chemicals, with products widely used in water treatment, pharmaceuticals, construction, and other fields. After the acquisition, it was consolidated into the industrial products segment, contributing about $1.4 billion in revenue in the second quarter.
The second: The acquisition of Taylor Morrison was completed on July 24, with Berkshire purchasing the U.S. homebuilder at $72.50 per share in cash, for a total equity consideration of about $6.8 billion. Taylor Morrison will be incorporated into the building products segment, alongside Clayton Homes, Shaw, Johns Manville, and other businesses. The timing of this acquisition—during a period of relatively subdued housing market activity due to high interest rates—signals Abel's confidence in long-term demand for residential construction.
These two acquisitions combined for about $16.2 billion in cash outlays, plus $11.6 billion in net stock purchases and roughly $4.8 billion in share buybacks, indicating that the pace of capital deployment under Greg Abel's leadership is accelerating across the board.
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