Berkshire Hathaway's equity portfolio is off to a strong start in the third quarter thanks to gains in many of its largest holdings, led by Apple and American Express.
The portfolio is up more than $20 billion since June 30, or about 6%, by Barron's estimates, while the S&P 500 is about flat. The portfolio now totals $356 billion based on CNBC's running total of its value.
Berkshire's largest holding, Apple, has climbed nearly 15% in July to about $330 after hitting a record high of just under $335 earlier Friday.
Investors are increasingly optimistic about Apple's AI strategy -- a sore point in recent quarters -- and appear encouraged that the company isn't spending as aggressively on AI development as some peers. Berkshire owned 228 million Apple shares on March 31, a stake now worth $75 billion.
Other Berkshire holdings posting gains so far this quarter include American Express, Coca-Cola, Moody's and Bank of America.
Unfortunately for shareholders, Berkshire reduced its Apple stake by more than 75% from its peak, with most of the shares sold in 2024 at much lower prices.
Higher equity prices across Berkshire's portfolio also boost shareholder equity, and we estimate that current book value is close to $535,000 per Class A share, up from our June 30 estimate of around $522,000.
Berkshire stock hasn't benefited from the gains in its portfolio, with Class A shares down about 1% since June 30.
The Class A shares were up 0.2% to $740,000 in afternoon trading Friday while the Class B stock was 0.1% higher to $493.70. Both classes of stock are down 2% this year, well behind the S&P 500's total return of more than 10%.
The stock now trades for a reasonable 1.4 times our estimate of the current book value, which is at the lower end of the range in recent years and down from a peak of 1.8 times in May 2025 just before Warren Buffett said he would step down as CEO at year-end 2025.
It can be hard to pinpoint why Berkshire stock is underperforming or outperforming the index.
But the stock could be lagging because it's the ultimate defensive stock in a technology-led rally this year. The company's diversified earnings power and cash holdings of nearly $400 billion, the most of any U.S. company, make it a classic sleep-well-at-night stock.
The "Buffett premium" has vanished from the stock and investors may be taking a wait-and see-attitude toward new CEO Greg Abel. The pace of investments -- including a $10 billion purchase of Alphabet stock in June -- remains modest relative to Berkshire's cash levels and its $1 trillion market value.
One encouraging sign is that Berkshire appeared to ramp up its share buyback in the second quarter. In an article Thursday, Barron's estimated that Berkshire bought back between $5 billion and $11 billion of stock in the second quarter and the first two weeks of July, compared with just $235 million in the first quarter, based on calculations keyed off a filing by Buffett of his ownership stake in Berkshire earlier this week.
Berkshire is due to report its second-quarter earnings around Aug. 1.
Berkshire stock likely would be higher if Buffett hadn't decided to slash the Apple stake.
Berkshire stock likely would be higher if Buffett hadn't decided to slash the Apple stake. With hindsight, Buffett's decision to sharply reduce Berkshire's Apple stake has proved costly. Berkshire's Apple holding peaked at about one billion shares before falling to about 228 million shares. The bulk of the selling occurred in the first half of 2024 when the stock traded around $190 a share.
Barron's estimates that Berkshire may have left as much as $100 billion on the table given the rally in Apple stock since 2024. Berkshire had a sizable tax bill that could have totaled about $20 billion on the Apple sales. Its cost basis is around $35 a share with most of the Apple purchases having occurred from 2016 to 2018 when the stock traded under 15 times earnings -- it now fetches over 30 times. Apple remains nearly a ten-bagger for Berkshire now.
Berkshire also appears to have sold its Bank of America stake too aggressively in the past two years as the stock has rallied lately and hit a new 52-week high of $62 earlier Friday. Berkshire owns 513 million shares, having sold the about 500 million shares in the 40s.
While Berkshire's Apple and Bank of America sales now appear ill-timed, the stock seems to be getting unfairly discounted even as the Berkshire portfolio advances.
Write to Andrew Bary at andrew.bary@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
July 17, 2026 15:34 ET (19:34 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments