To The Moon

No one can predict the future with certainty over a full decade, but Berkshire’s business model is built for durability and compounding, which supports reasonable projections. I’ll focus strictly on earnings, strategy, and share price/market cap based on the latest 2025 full-year results, Greg Abel’s first shareholder letter as CEO, historical trends, and the realities of Berkshire’s current scale.

Current Snapshot (as of early 2026)Operating earnings (Berkshire’s preferred metric): $44.5 billion in 2025, down from $47.4 billion in 2024 but still above the five-year average of about $37.5 billion. Insurance underwriting and investment income faced some cyclical pressure.

Net earnings (GAAP, including volatile investment gains/losses): Roughly $67 billion in 2025, impacted by mark-to-market effects.

Cash and short-term investments: Exceeding $370 billion (with some reports around $373 billion), providing significant dry powder.

Insurance float: $176 billion at year-end 2025, up modestly and continuing to serve as low-cost capital.

Market cap: Approximately $1.02–1.05 trillion.

Share price (recent closes): BRK.A around $728,000; BRK.B around $480–485.

Berkshire is a mature, diversified colossus spanning insurance, railroads (BNSF), utilities (Berkshire Hathaway Energy), manufacturing, consumer brands, and a large equity portfolio. Its enormous size acts as both a competitive advantage (stability, access to deals) and a limiter on growth rates.

Strategy: Strong Continuity Under Greg AbelGreg Abel became CEO on January 1, 2026 (Warren Buffett remains Chairman). His first shareholder letter emphasizes no major changes: culture, values, and core approach stay the same—decentralized operations, owner-oriented mindset, a fortress balance sheet, and capital allocation aimed at growing intrinsic value per share over the very long term.Key elements expected to persist:Insurance as the foundation: Focus on disciplined underwriting profits and growing float (the “float” is money held from premiums before claims are paid, which can be invested). Expect ongoing strength, though pricing competition and claims trends may create periodic headwinds.

Buying and holding great businesses: Look for high-quality acquisitions or expansions when prices make sense, plus incremental equity investments (recent examples include moves in Japan). Share repurchases only when stock trades below intrinsic value.

Cash as strategic flexibility: The large cash hoard is positioned as ammunition for opportunities or crises, not a sign of caution. Deployment will remain opportunistic and conservative.

Operational focus: Emphasis on efficiency, customer service, and continuous improvement across subsidiaries while keeping them autonomous. Abel’s background may bring extra attention to areas like rail margins and energy operations.

Overall, Berkshire will avoid chasing trends, excessive leverage, or dividends if reinvestment creates more value. It will compound patiently and act decisively in downturns. Risks include succession execution challenges or prolonged high market valuations limiting big moves. Upside comes from smart capital deployment during the next major dislocation.

Earnings: Steady Compounding at a Mature ScaleBerkshire’s operating earnings should continue to grow, but the rate will be more moderate due to its trillion-dollar-plus size. Historical book-value-per-share growth (a solid proxy for intrinsic value) has averaged around 11–12% over the past decade, slower than in earlier eras because of scale.My base-case projection for the next 10 years (to 2036):Operating earnings CAGR: 7–9% annually. This reflects mid-single-digit growth in subsidiary revenues, efficiency improvements, selective acquisitions, and returns from investments (equities plus cash holdings). Insurance results will remain somewhat lumpy but profitable over cycles.

Rough math: Starting from $44.5 billion in 2025, an 8% CAGR would reach about $96 billion by 2036 (7% scenario ≈ $87 billion; 9% ≈ $105+ billion).

Cash generation from operations remains strong (recently around $46 billion net cash flow in 2025, above the five-year average).

Net earnings will continue fluctuating due to equity portfolio mark-to-market swings, but the focus for long-term owners should stay on operating earnings and underlying business power. Downside risks include insurance market softness, recessions affecting subsidiaries, or investment losses. Upside potential lies in strong execution or major cash deployment in attractive environments.Share Price and Market Cap: Reliable Compounding with Lower VolatilityBerkshire does not pay dividends, so returns come primarily through share-price appreciation (supported by occasional repurchases when undervalued). It has historically traded at a modest premium to book value during strong periods (recent price-to-book around 1.4–1.5x).Base-case outlook to 2036:Market cap: From roughly $1.05 trillion today to a range of $2.3–3.2 trillion. This assumes 8–11% annualized total returns, driven by earnings growth plus support from repurchases and the cash position. This pace aligns with a high-quality, mature compounder that tends to hold up better in downturns.

Share price (using BRK.B as example): From around $480–485 today to roughly $1,000–1,500+ in the base case (again implying 8–11% CAGR). BRK.A would scale similarly.

This range is grounded in intrinsic value growing with earnings power and book value, plus a valuation premium for Berkshire’s stability and optionality. It won’t deliver the highest growth rates—that phase is long behind it—but it should provide solid, lower-volatility returns.Bull case (10–12%+ annualized returns): Highly effective cash deployment in a downturn combined with strong subsidiary performance could push market cap above $3.5 trillion.

Bear case (5–7% returns): Extended high valuations limiting acquisitions, persistent insurance pressures, or broader economic stagnation could keep market cap in the $1.8–2.2 trillion area.In 10 years, Berkshire should be an even larger, more resilient business that still operates with the same disciplined, patient approach. It won’t be the flashiest performer, but for patient owners it remains one of the most reliable ways to compound capital over decades. This is my synthesis based on available data and trends—not a guarantee.