Reviewing the latest 13F filing from Himalaya Capital, one might have expected the usual inactivity, but instead, it revealed a significant shift akin to a dormant volcano becoming active.
In recent years, Himalaya Capital's U.S. stock portfolio has been highly concentrated, with typically minimal quarterly adjustments. However, the 13F disclosed on May 15th shows a clear departure from this pattern.
As of March 31, 2026, Himalaya Capital established five new positions in a single move: Tencent Music, S&P Global, H&R Block, Moody's, and MSCI. Concurrently, the firm increased its stake in Crocs by 41.22% and drastically reduced its holding in Bank of America by 71.26%, a stock that had been a top holding for multiple consecutive quarters.
For an investor long known for concentration and low turnover, such portfolio adjustments are highly unusual.
The latest 13F shows Himalaya Capital's total U.S. equity portfolio value was approximately $3.2 billion at the end of Q1, down from $3.57 billion at the end of 2025, primarily due to a price correction in its top holding, Google.
Even as the number of holdings expanded from 9 to 14, the concentration in the top ten holdings remained extremely high at 96%, indicating the firm's style of holding a few high-quality assets remains unchanged.
The complete U.S. equity portfolio is as follows:
(Note: 13F filings only reflect long U.S. equity positions and do not include cash, Hong Kong stocks, A-shares, non-U.S. listed securities, derivatives, or intraday trading. Therefore, it does not represent Himalaya Capital's complete portfolio.)
Examining the moves individually:
**Q1 Purchase of the "Ratings + Index" Trio** Among the five new positions established by Li Lu, three can be viewed together at the same table—Moody's, S&P Global, and MSCI.
To be more precise, these are not traditional "financial data giants" like Bloomberg, Refinitiv, or FactSet data terminals. Instead, they represent two key types of capital market infrastructure.
Moody's and S&P Global have long constituted a duopoly in the global credit rating market. Together with Fitch, the three major rating agencies dominate the vast majority of the global market. This is a business with a century-long history, protected by regulatory licensing and issuer inertia.
MSCI is a leader in global index licensing and ESG ratings. The latest data from the company's website shows that assets benchmarked to MSCI equity indices have reached approximately $21 trillion.
These three companies share very consistent characteristics: highly concentrated market share, subscription and licensing-based revenue, extremely high switching costs, minimal capital expenditure requirements, and stable, growing free cash flow.
Warren Buffett's fondness for Moody's is an open secret in the value investing community. Berkshire Hathaway has held the stock since its spin-off from Dun & Bradstreet in 2000, for over 25 years, and it remains one of its top ten holdings.
As of Q1 2026, Berkshire's Moody's position was valued at approximately $10.762 billion, ranking as its ninth-largest U.S. stock holding.
Buffett's logic for liking Moody's is simple: it's a "money-printing machine" that requires almost no new capital investment, has stable annual pricing power, and sees demand expand with the long-term growth of the bond market.
By purchasing both credit rating duopolists and the index licensing leader simultaneously, forming a "trio," Li Lu's move appears less like timing a single stock and more like a strategic allocation to the entire "ratings + indices" business category.
The combined market value of these three new positions is approximately $113 million. Among them, the positions in S&P Global and Moody's are each around 1.6%, while MSCI is only 0.32%, resembling a small, exploratory stake.
While the positions are not large, the direction is clear. In Q1, Li Lu began systematically adding exposure to this category of capital market infrastructure assets: "ratings + indices + data licensing."
Interestingly, Berkshire Hathaway also made rare, significant moves in Q1 2026—aggressively increasing its Class A Google position by 204% and establishing a new Class C position, elevating it to its seventh-largest holding. Simultaneously, it exited positions in Amazon, Visa, Mastercard, and UnitedHealth.
In this quarter, Li Lu and Berkshire's new CEO, Greg Abel, almost simultaneously chose a combination of "tech leader + long-term franchise assets."
**Contrarian Position in Tencent Music Amid Panic Selling** In Q1, Li Lu established a new position of 6.59 million shares in Tencent Music, with an end-period value of approximately $61.16 million, making it the portfolio's ninth-largest holding.
Timing-wise, this entry has a distinct "contrarian buy" flavor.
Tencent Music's U.S.-listed shares plunged 24.65% in a single day on March 17, 2026, hitting a 52-week low. The trigger was its Q4 2025 earnings report.
The company disclosed that its online music MAU (Monthly Active Users) was 528 million, a 5% year-over-year decline, marking the first significant contraction since its IPO. It also announced that, starting Q1 2026, it would no longer disclose quarterly MAU, paying user, and ARPPU (Average Revenue Per Paying User) data, shifting to annual disclosure.
The market reaction was severe, with the stock declining approximately 47.72% cumulatively in Q1 2026.
However, examining the company's fundamentals reveals a picture far less dire than the stock price suggests.
Full-year 2025 total revenue reached RMB 32.9 billion, a 15.8% year-over-year increase, setting a historical high.
In Q1 2025, the company recognized a one-time deemed disposal gain of RMB 2.37 billion from acquiring a 2% stake in Universal Music Group (UMG). This pushed IFRS (International Financial Reporting Standards) net profit attributable to shareholders to RMB 11.06 billion, a significant 66.4% year-over-year increase.
Excluding this one-time gain and other non-recurring items like share-based compensation, the non-IFRS net profit attributable to shareholders was RMB 9.59 billion, a 25% year-over-year increase—a metric that better reflects the true profitability of its core business.
The freshly released Q1 2026 results continued to show growth: total revenue of RMB 7.9 billion, up 7.3% year-over-year; non-IFRS net profit attributable to shareholders of RMB 2.27 billion, up 7% year-over-year.
Within this, music-related service revenue grew 12.2% year-over-year, membership service revenue grew 6.6%, and non-membership music-related service revenue surged 28%.
Supporting this growth is Tencent Music's long-accumulated copyright resources, platform distribution capabilities, and paid membership system within China's online music market. Especially in the context of rapidly increasing AI-generated content, licensed, sustainably monetizable music IP has arguably become more scarce.
Company CEO Liang Zhu specifically emphasized in the latest earnings call, "Based on a robust copyright protection system, we are committed to transforming the value of music into a driving force for innovation and development, exploring new opportunities for the music industry, and creating sustainable long-term value."
Entering when the market was broadly bearish aligns with the consistent logic behind Li Lu's past contrarian moves—heavily buying Pinduoduo in Q2 2025 when sentiment towards China concept stocks was at an extreme low, and establishing a new position in Crocs in Q4 2025 when the Hey Dude brand faced maximum impairment pressure.
**H&R Block: A Boring but Steady Cash Flow Business** The new position in H&R Block consists of 1.627 million shares, with an end-period value of approximately $51.64 million, representing 1.61% of the portfolio.
Founded in 1955, this is a U.S. chain tax preparation service company and one of the most recognized brands in the American tax preparation market.
Its business structure is very clean in the eyes of value investors:
* High-certainty demand: Tax filing is a legal requirement, done annually. * Extremely seasonal cash flow: The U.S. tax season is concentrated in the first half of the calendar year, corresponding to the third and fourth quarters of its fiscal year (ending June 30), which is the window for the most concentrated profit release. * Light on capital investment: Core assets are its brand, store network, and digital tools. * Sustained, substantial share repurchases: The company repurchased approximately $400 million in shares in fiscal 2025. As of the end of Q1 fiscal 2026, about $700 million in authorization remained under its $1.5 billion repurchase program.
HRB's guidance for fiscal 2026 is: revenue of $3.875-$3.895 billion, EBITDA of $1.015-$1.035 billion, and adjusted diluted EPS of $4.85-$5.00. Based on a recent stock price around $37 and the fiscal 2026 adjusted diluted EPS guidance, the forward P/E ratio is approximately 7.5x.
This is a classic example of a business the market considers "boring" but capable of consistently generating cash. The logic mirrors Li Lu's move into Crocs last quarter: sufficiently cheap, sufficiently stable, with ongoing substantial share repurchases to enhance per-share value.
**Choosing to Add to One "New Favorite" and Reduce an "Old Love"** For Crocs, a position of 628,000 shares established last quarter (Q4), Li Lu added approximately 259,000 shares in the past quarter (Q1). The holding quantity increased by 41.22%, resulting in an end-period holding of 887,000 shares.
On February 12, 2026, the day Crocs disclosed its 2025 annual report and repurchase plan, its stock surged nearly 20%. From the initial purchase to the addition, it's evident that Li Lu does not view Crocs as a short-term trade but rather continued to affirm his judgment from the previous quarter as the price recovered.
Samantha McLemore, founder of Patient Capital, also noted in a recent exchange earlier this year that Crocs' free cash flow yield and P/E ratio were at attractive levels at the time, with market pricing implying very low growth expectations. The situation with the Hey Dude brand and the involvement of Chief Brand Officer Terence Reilly essentially provided a free option on a potential turnaround opportunity.
If the previous moves were "additions," the most significant "subtraction" was applied to Bank of America.
Li Lu sold approximately 7.43 million shares of Bank of America in Q1, reducing the share count by 71.26%. The end-period holding value fell to approximately $146 million, dropping from its previous position as the fourth-largest holding to the sixth.
It's worth noting that Bank of America was once a core position in Li Lu's portfolio, with a holding value exceeding $600 million at one point.
Berkshire Hathaway has also significantly reduced its exposure to traditional bank stocks over the past year or more, exiting or reducing stakes in several financial institutions, with Bank of America being the most significant. It has been consistently reduced since mid-2024, with the share count substantially lower than its peak by the end of 2025; a slight reduction continued in Q1 2026.
Notably, the position in another bank stock within Li Lu's portfolio—East West Bancorp—remained completely unchanged for multiple consecutive quarters, ranking as the fifth-largest holding with a market value nearing $300 million.
East West Bancorp's client structure, regional attributes, and business focus differ from those of comprehensive large banks, but it is still not immune to the influences of interest rate cycles, credit cycles, and regional economic conditions.
Therefore, rather than a simple "reduce big banks, keep specialty banks," it's more accurate to say that within the banking sector, Li Lu is emphasizing assets he is familiar with, has tracked for a longer time, and that possess more differentiated business models.
**Google and Berkshire Remain "Ballast" Holdings** Following the significant portfolio adjustments, Google remains the undisputed top holding in Li Lu's portfolio, with Class A and Class C shares combined accounting for 44.82%.
In Q1 2026, Google's stock price corrected from its late-2025 highs, but Li Lu made no changes to his share count.
In fact, Berkshire's Q1 addition to Google was "substantial," increasing Class A shares by 204% and establishing a new Class C position, bringing the total holding to $16.6 billion and elevating it to the seventh-largest holding.
However, Li Lu first established a position in Google Class C back in Q2 2020 and made two significant additions during the 2022 market downturn, making it one of the representative cases of "buying on the dip."
Now that Google has once again become a key addition for long-term capital like Berkshire, while Li Lu positioned himself five or six years ago and continues to hold, it sufficiently demonstrates his long-term confidence in Google as "one of the core infrastructures of the AI era."
Berkshire Hathaway itself is maintained at 897,749 shares in Li Lu's portfolio, representing 13.44% of the portfolio's value.
In early 2026, Buffett formally handed over the CEO role to Greg Abel, while remaining Chairman. The market widely expressed concern about whether Berkshire's investment style would change in the "post-Buffett era."
Judging from Berkshire's first "post-Buffett era" 13F in Q1, the investment style has been maintained with considerable restraint: core holdings like Apple, American Express, and Coca-Cola remained unchanged; Google was aggressively added to, and new positions were established in Delta Air Lines and Macy's; while reductions in Bank of America continued, and positions in Amazon, Visa, Mastercard, and UnitedHealth were exited.
(It's worth noting that in December 2025, Berkshire investment manager Todd Combs left to join JPMorgan. Stocks like Amazon, Visa, Mastercard, and UnitedHealth were generally considered part of Combs's portfolio. Therefore, the Q1 exits appear more like portfolio adjustments following Combs's departure.)
From a holding perspective, for Li Lu, who has long studied and deeply identifies with Berkshire's corporate culture, the leadership transition does not constitute a selling reason.
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