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Berkshire's $381B Cash Reserve and Discreet Share Repurchases Amid Leadership Change

Berkshire's $381B Cash Reserve and Discreet Share Repurchases Amid Leadership Change

Bitget-RWA2025/11/01 18:36
By:Bitget-RWA

- Berkshire Hathaway's Q3 operating earnings rose 34% to $13.485B, driven by a record $381.67B cash reserve and 200% surge in insurance profits. - No 2025 share buybacks and CEO transition risks sparked investor concerns, with shares down 11.5% since May amid leadership uncertainty. - Greg Abel's leadership faces scrutiny as Berkshire remains a net seller of equities for 12 consecutive quarters despite $13.5B operating income. - $9.7B OxyChem acquisition marked rare capital deployment, contrasting with Buf

Berkshire Hathaway Inc. (BRK.A, BRK.B) posted a 34% jump in operating earnings for the third quarter compared to last year, fueled by an unprecedented $381.67 billion in cash and strong results from its insurance underwriting business, as per a

. The conglomerate's operating profit reached $13.485 billion, with insurance underwriting income soaring more than 200% to $2.37 billion, reported. Despite these positive results, Berkshire stuck to its stance of not repurchasing shares in 2025, a move that has raised questions among investors about how the company will use its capital and manage leadership changes.

Berkshire's $381B Cash Reserve and Discreet Share Repurchases Amid Leadership Change image 0

The company’s cash holdings, now at a record high, are the result of strong business performance, a lack of share buybacks, and selective asset sales. Net earnings attributable to shareholders rose to $30.796 billion, a 17% increase from the previous year, according to a

. Yet, the decision not to buy back any shares in the first nine months of 2025 has drawn criticism. Since Warren Buffett revealed his plans to step down as CEO in May, Berkshire’s stock has fallen 11.5%, noted. Analysts have downgraded the stock, pointing to uncertainties around leadership and shrinking reinsurance profits, as reported by Seeking Alpha.

Warren Buffett, now 95, will retire as CEO by the end of the year, with Greg Abel set to take over. This leadership change has already affected investor confidence, with Berkshire’s shares lagging the S&P 500 by 10.9 percentage points as of late October, according to Benzinga. Abel, who will also write the annual shareholder letter starting in 2026, inherits the challenge of upholding Buffett’s legacy while steering the company through a changing economic environment. Analysts at Keefe, Bruyette & Woods lowered their price target for Class A shares from $740,000 to $700,000, calling the stock “underperform,” as reported by Seeking Alpha.

Berkshire’s cautious approach to its massive cash reserves has fueled ongoing debate about its investment tactics. Although the company earned $13.5 billion in operating income, it continued to be a net seller of stocks for the twelfth straight quarter, realizing $10.4 billion in taxable gains, according to

. Some, like Edward Jones analyst James Shanahan, believe Abel could boost confidence by ramping up investments or initiating buybacks, a view mentioned in the earlier report. Others, such as longtime shareholder Tom Russo, highlight Berkshire’s enduring strength, pointing to its diverse portfolio of 200 businesses, ranging from railroads to consumer goods, as noted by .

One significant exception to Berkshire’s conservative cash management was its $9.7 billion purchase of Occidental Petroleum’s OxyChem division in October—the company’s biggest acquisition since 2022, according to

. This deal suggests a measured willingness to invest, though it represents only a small portion of Berkshire’s available funds. Meanwhile, Buffett’s reluctance to follow market rallies has led some to question his view of current stock valuations. “Warren didn’t see any bargains,” one analyst remarked, underscoring the contrast between Berkshire’s cash position and the S&P 500’s 16.3% gain so far this year.

As the leadership handover approaches, investors are watching closely to see how Abel will balance Berkshire’s traditional conservatism with the need for growth. For now, the company’s record cash and strong operating results highlight its financial stability, even as uncertainty remains about its path forward.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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