Berkshire Hathaway built its cash reserves to a record level in the first quarter as the conglomerate continued selling stocks and prepared for a new chapter under chief executive Greg Abel. The company said its cash and short-term investments reached $397.4 billion at the end of March. Berkshire also sold a net $8.1 billion worth of stocks during the quarter, marking its 14th consecutive quarter as a net seller of equities, reported Reuters.
The results came as Abel began his first full quarter as chief executive after taking over from legendary investor Warren Buffett earlier this year. Buffett, 95, remains chairman of Berkshire Hathaway and plans to attend annual shareholder meeting in Omaha, Nebraska, on Saturday, as an observer while Abel answers questions from investors and discusses the company’s future.
Berkshire’s latest figures showed how cautious the company has become at a time when stock markets trade near record highs and technology shares continue to dominate Wall Street gains. The company’s growing cash pile also reflected the difficulty Berkshire faces in finding large acquisitions or investments that can significantly impact a business valued at more than $1 trillion.
Operating earnings rose nearly 18% to $11.35 billion during the first three months of the year. Insurance underwriting profits climbed about 29% to $1.7 billion after losses tied to the Los Angeles wildfires weighed on results a year earlier.
Berkshire also restarted share buybacks for the first time since May 2024. The company repurchased about $234 million of its own stock during the quarter. Abel had earlier said Berkshire believed its shares traded below their intrinsic value.
Why is Berkshire holding so much cash?
The record cash balance raised questions about Berkshire’s investment strategy under Abel. The company has reduced its stock holdings for more than three years and has struggled to deploy large amounts of capital in a market many investors consider expensive.
Buffett built his reputation by buying companies and stocks during periods of market weakness. But Berkshire has recently preferred to hold cash and invest heavily in US Treasury bills, which benefited from higher interest rates.
The company’s latest filing showed Berkshire remained cautious even as markets recovered from recent volatility. Investors closely watched whether Abel would take a more aggressive approach after becoming chief executive. Instead, the first quarter suggested Berkshire’s conservative strategy remained largely unchanged, reported NDTV Profit.
Berkshire’s stock has also faced pressure since Buffett announced plans last year to step aside as chief executive. Shares of the conglomerate have underperformed the benchmark S&P 500 by 39 percentage points during that period.
Some investors worry Berkshire may struggle to match the growth rates of technology-focused companies that dominate the broader market. Berkshire owns major businesses in insurance, railroads, utilities, manufacturing and retail, sectors that many investors view as slower growing than artificial intelligence and software companies.
Can Greg Abel win over investors?
Abel now faces the difficult task of convincing shareholders that Berkshire can continue growing after Buffett’s leadership era. Buffett transformed Berkshire from a struggling textile company into one of the world’s largest conglomerates over six decades, reported NDTV Profit.
Many investors still view Buffett as the face of Berkshire Hathaway. His retirement from the chief executive role raised concerns about whether the company can maintain the same investment discipline and long-term performance under new leadership.
The Wall Street Journal reported in April that Abel sold equity holdings previously managed by former Berkshire investment manager Todd Combs. Combs later joined JPMorgan Chase & Co. in an advisory role.
Despite investor concerns, Berkshire’s core businesses remained profitable. The company benefited from stronger insurance operations and stable earnings across many of its industrial and energy units.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor in the respective jurisdiction.