Berkshire Puts More Cash to Work With $4.5 Billion Buyback and Heavy Stock Buying

Berkshire Hathaway is beginning to put more of its enormous cash pile to work, buying $23.5 billion of stocks in the second quarter, repurchasing $4.5 billion of its own shares and ending a run of 14 consecutive quarters in which it had been a net seller of equities.

The shift came during Greg Abel’s second quarter as Berkshire’s chief executive and coincided with stronger operating results across several of the conglomerate’s businesses. Berkshire’s operating earnings rose 16% from a year earlier to $12.98 billion, while revenue increased 10% to $101.81 billion.

Berkshire’s cash, cash equivalents and U.S. Treasury bill holdings fell to $364.7 billion at June 30 from a record $380.2 billion three months earlier. That still leaves the company with one of the largest corporate cash reserves in the world, but the direction is notable after years in which the pile kept getting larger as Warren Buffett found relatively few opportunities big enough and attractive enough to materially move Berkshire’s results.

The company bought nearly $20 billion more stocks than it sold during the quarter. The purchases included another $10 billion invested in Alphabet, Google’s parent company, which is now among Berkshire’s largest equity holdings. Berkshire’s total purchases of other stocks reached $23.5 billion.

At the same time, Berkshire spent $4.5 billion buying back its own Class A and Class B shares between April and June. That was a sharp acceleration from the relatively small amount repurchased in the first quarter and from 2025, when Berkshire bought back no stock at all. The repurchases did not stop when the quarter ended. Berkshire bought more than $3.3 billion of additional shares in July.

Taken together, the stock purchases and buybacks represent a meaningful change in the way Berkshire’s capital is moving. It is too early to conclude that Abel has adopted a fundamentally different investment philosophy from Buffett, particularly because Buffett remains Berkshire’s chairman and is still involved in major decisions. But the pace of deployment is already faster than it was during Buffett’s final stretch as chief executive.

The buyback carries a valuation message

Berkshire’s share repurchases are more significant than an ordinary corporate buyback because of the way its program is structured.

The company does not have a conventional authorization requiring management to spend a fixed amount over a particular period. Berkshire’s policy permits shares to be repurchased only when the chief executive, after consulting with the chairman, believes the purchase price is below Berkshire’s intrinsic value, conservatively determined. There is no specified maximum repurchase amount, although Berkshire will not buy shares if doing so would reduce its cash, cash equivalents and Treasury bills below $30 billion.

The policy was amended ahead of Berkshire’s leadership transition so that responsibility for the valuation decision would pass from Buffett to Abel. Berkshire’s annual report says major investment and capital-allocation decisions are now Abel’s responsibility, while Buffett remains chairman.

That means the $4.5 billion second-quarter buyback amounts to more than a way of reducing Berkshire’s share count. Under Berkshire’s own stated policy, it indicates that Abel, after consultation with Buffett, considered the shares to be available at prices below a conservative estimate of intrinsic value.

Berkshire had gone nearly two years without making substantial repurchases before announcing in March that it had resumed buying its own stock. The company disclosed in an SEC filing that repurchases restarted on March 4. Only modest purchases were made before the first quarter ended.

The second-quarter spending therefore marks the first major test of the repurchase policy under Abel. The $4.5 billion quarterly figure is also large by Berkshire’s recent standards. Reuters noted that the current pace is comparable with some of the more aggressive repurchasing periods under Buffett. Berkshire’s biggest full year for buybacks was 2021, when it spent about $27 billion purchasing its own shares.

July’s additional $3.3 billion means Berkshire repurchased more than $7.8 billion of stock from the beginning of April through the end of July.

The renewed buying comes after Berkshire shares spent much of the period following Buffett’s succession announcement trailing the broader market. Even after this year’s gains, Berkshire’s Class A shares were up about 3% for 2026 through the end of last week, compared with a roughly 13% gain for the S&P 500. Since Buffett announced in May 2025 that he would step down as CEO, Berkshire had lagged the index by about 40 percentage points through Friday.

Investors responded positively Monday. Berkshire’s Class A shares rose as much as 3.3% to $806,102.81, while the Class B shares climbed as much as 3.1% to $537.74. Both reached their highest levels since May 2, 2025, the day before Buffett announced that Abel would succeed him.

Berkshire ended a 14-quarter stretch of net stock selling

The buybacks were only one part of the capital deployment. Berkshire had spent more than three years selling more publicly traded stocks than it purchased. That trend helped push the company’s cash holdings progressively higher and culminated in the enormous liquidity position inherited by Abel when he became CEO on January 1. Berkshire’s SEC filings formally assign major investment and capital-allocation decisions to Abel.

The second quarter broke that pattern. Berkshire purchased $23.5 billion of stocks and finished the quarter with nearly $20 billion more equity purchases than sales.

Alphabet accounted for a large portion of that deployment. Berkshire added $10 billion to its investment in the Google and YouTube parent during the quarter, taking the position into the ranks of Berkshire’s largest stock holdings.

The move is particularly noteworthy given Berkshire’s historically selective exposure to large technology companies. Apple became Berkshire’s biggest equity holding under Buffett, but Buffett frequently described Apple in terms of the strength of its consumer franchise rather than treating the investment simply as a technology bet. Alphabet adds another very large technology platform to a portfolio that has traditionally been concentrated in companies such as Apple, American Express, Coca-Cola and major financial and energy businesses.

The change should not automatically be interpreted as evidence that Abel alone initiated every second-quarter investment. Buffett remains chairman, and Reuters reported that Buffett said last month that he remains involved in Berkshire’s decision-making and that neither he nor Abel was taking major actions that the other did not approve.

What is clear from the numbers is that Berkshire is deploying capital considerably faster than it had been.

The company’s activity extends beyond publicly traded stocks. Berkshire completed its acquisition of Taylor Morrison on July 24, paying $72.50 a share in cash. The transaction valued the homebuilder’s equity at approximately $6.8 billion and the business at about $8.5 billion including debt and other enterprise-value adjustments. Taylor Morrison is being combined with Berkshire’s existing site-built homebuilding operations.

Berkshire’s July cash deployment therefore included at least $3.3 billion of additional share repurchases and $6.8 billion for Taylor Morrison, or more than $10 billion in those two uses of capital alone.

The Taylor Morrison purchase followed Berkshire’s roughly $9.5 billion acquisition of Occidental Petroleum’s OxyChem business in January. At the end of the first quarter, Berkshire’s SEC filing showed that the company still held hundreds of billions of dollars in cash and Treasury bills even after completing that transaction.

This is the challenge that has long shaped Berkshire’s capital allocation: even multibillion-dollar investments make only modest dents in its liquidity.

A company with $364.7 billion of cash and Treasury bills cannot materially improve its long-term returns with a series of small acquisitions. Berkshire needs very large investments, sustained stock purchases, major buybacks or some combination of all three for capital deployment to have a meaningful effect on the overall company.

The second quarter was the first period in years when Berkshire was doing several of those things at once.

Stronger businesses gave Berkshire more cash to deploy

Berkshire’s investment activity arrived alongside an improvement in operating performance, reducing the sense that the company was simply spending down accumulated cash.

Second-quarter operating earnings rose to $12.98 billion from $11.16 billion a year earlier, a 16% increase. Berkshire emphasizes operating earnings because its GAAP net income can swing sharply from quarter to quarter with unrealized changes in the value of its enormous stock portfolio.

Net income more than doubled to $25.67 billion from $12.37 billion a year earlier, but that figure included gains and losses on investments Berkshire continued to own. The company has repeatedly cautioned shareholders against using those short-term market movements to evaluate its underlying operating performance.

BNSF, Berkshire’s railroad, reported a 6% increase in profit to $1.56 billion. The railroad benefited from higher shipments of consumer, agricultural and energy products as well as fuel-related revenue.

Berkshire Hathaway Energy performed even better on a percentage basis. Profit rose 27% to $891 million, helped by stronger utility margins and tax credits. Service businesses including private-aircraft operator NetJets and electronic-components distributor TTI also contributed to the improvement in operating earnings.

Not every major business improved. Geico’s pre-tax underwriting profit dropped 45% as accident claims increased and the auto insurer spent more on advertising. Berkshire has been trying to rebuild Geico’s customer base after several years of emphasizing underwriting discipline and cost reductions. Overall insurance and reinsurance profit fell 11% in the quarter.

Berkshire also warned that some of its consumer-facing companies were seeing weaker demand. The company cited businesses including its auto dealerships, Fruit of the Loom and recreational-vehicle maker Forest River as areas where changes in consumer confidence were affecting sales. It also said considerable uncertainty remained around tariffs, wars and other macroeconomic and geopolitical developments.

Those pressures make the scale of the cash reserve relevant. Even after the recent spending, $364.7 billion gives Berkshire substantial capacity to absorb losses, finance its insurance operations and act if larger investment opportunities become available.

The more important change is that the cash balance is no longer moving in only one direction.

Abel inherited a company whose ability to generate cash had increasingly outrun its ability to deploy it. In the second quarter, Berkshire simultaneously bought public stocks, repurchased its own shares and moved toward closing a multibillion-dollar acquisition, while its operating businesses generated higher profits.

That does not establish a new long-term capital-allocation pattern after only one quarter. Berkshire’s own buyback policy is explicitly valuation-dependent, and the company is under no obligation to continue repurchasing shares if Abel and Buffett no longer consider the price attractive.

But the spending continued into July, which makes the second-quarter shift harder to dismiss as a one-time adjustment. By the end of that month, Berkshire had spent another $3.3 billion buying its own shares and completed the $6.8 billion Taylor Morrison acquisition.

For a company still holding more than $360 billion of cash and Treasury bills, the question is no longer simply whether Berkshire can find something to buy. The early Abel period is beginning to show how much capital Berkshire is willing to deploy when management believes the price and opportunity are right.

Sources

Reuters: Berkshire Q2 results, cash holdings, investments, buybacks and operating-company performance.

Reuters: Berkshire share-price reaction on August 10.