Berkshire Hathaway (BRK.B) Stock: Why Warren Buffett Keeps Selling and Building Cash

TLDR

• Berkshire Hathaway’s cash reserves hit $381.7 billion in Q3, marking the highest level in company history
• Q3 operating profit surged 34% to $13.49 billion, beating Wall Street estimates on strong insurance performance
• Warren Buffett exits as CEO in December after 60 years, with Greg Abel taking over the $1.03 trillion conglomerate
• The company sold stocks for a 12th straight quarter and skipped buybacks for the fifth consecutive quarter
• Berkshire shares dropped 12% since Buffett’s May retirement announcement, lagging the S&P 500 by 32 percentage points

Berkshire Hathaway posted strong third-quarter earnings while continuing to build its cash fortress. The company’s cash position reached $381.7 billion, up from $277 billion a year ago.

Operating profit climbed 34% to $13.49 billion. The results topped analyst expectations. Net income grew 17% to $30.8 billion.

Warren Buffett is stepping down as CEO at the end of December. He has led the company for 60 years. Vice Chairman Greg Abel will take the reins of the $1.03 trillion conglomerate.

Berkshire Hathaway Inc., BRK-B

The company extended its selling streak to 12 quarters. Berkshire sold more stocks than it bought during Q3. The equity portfolio now totals $283.2 billion, including large stakes in Apple and American Express.

Share buybacks remained on pause for the fifth consecutive quarter. Revenue grew just 2%, slower than overall economic growth. Several consumer-facing businesses reported weaker sales due to economic uncertainty.

Insurance Powers Profit Growth

Insurance operations drove the earnings beat. Underwriting income jumped to $2.37 billion from $750 million a year earlier. The quarter avoided major catastrophes like hurricanes.

Geico’s premium growth came in at 5%. The auto insurer increased spending, likely on advertising for new customers. Insurance investment income fell 13% to $3.18 billion as interest rates declined.

The BNSF railroad boosted profit 6% on lower fuel costs. Berkshire Hathaway Energy saw profit drop 9% due to wildfire legal costs and pipeline expenses.

Currency gains accounted for over 40% of the operating profit increase. Insurance float stood at $176 billion during the quarter.

Stock Performance and Investor Concerns

Investors have punished Berkshire shares since the retirement announcement. The stock fell 12% since May 3 when Buffett revealed his exit plans. It has trailed the S&P 500 by 32 percentage points during that period.

For 2025, Berkshire lags the index by 11 percentage points. Analysts say investors want action on the massive cash pile. CFRA Research maintains a “hold” rating, citing a lack of catalysts.

Edward Jones upgraded the stock to “buy” in September. The firm notes Abel will inherit substantial resources to deploy. Some analysts speculate Abel might institute Berkshire’s first dividend since 1967.

What’s Next for Berkshire

The company plans to spend $9.7 billion on Occidental Petroleum’s OxyChem business. The deal was announced October 2. This represents one of few major capital deployments recently.

Berkshire owns nearly 200 businesses across multiple sectors. These include Dairy Queen, See’s Candies, Duracell, and Fruit of the Loom. The company hasn’t made a major acquisition since buying Precision Castparts for $32.1 billion in 2016.

Abel is known as a hands-on operator. What he does with the record cash position remains the biggest question. Options include acquisitions, increased capital spending in existing businesses, or returning cash to shareholders.

The company is evaluating how President Trump’s One Big Beautiful Bill Act might impact renewable energy projects. Berkshire continues monitoring the regulatory environment as leadership changes.

Berkshire’s Q3 results showed insurance strength and conservative financial management as the Buffett era comes to a close.

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