Shares of Berkshire Hathaway climbed on Monday to their highest point since early May 2025 as the conglomerate's new leadership began deploying a large cash balance and reported quarterly financials that topped analysts' forecasts.
Cash and capital deployment
Berkshire said cash on hand fell to $364.7 billion on June 30, down from a record $380.2 billion three months earlier. During the second quarter the company repurchased $4.5 billion of its own stock and acquired $23.5 billion of other stocks, including a $10 billion stake in Alphabet, the parent company of Google and YouTube.
The company also spent at least $10.1 billion more in July, a sum that covered additional buybacks and the acquisition of home builder Taylor Morrison.
Quarterly results
Operating profit for the second quarter rose 16% to $12.98 billion. Management attributed that gain to strength in the railroad, service and certain insurance businesses, which helped offset the effects of rising accident claims and increased advertising outlays at the Geico car insurer.
Net income more than doubled to $25.67 billion for the quarter, a figure that included paper gains on investments such as stakes in Alphabet and Apple. Revenue grew 10% in the period, marking a break from more than two years of largely stagnant top-line performance.
Market response and trading levels
In morning trading, Berkshire Class A shares rose as much as 3.3% to $806,102.81. Class B shares, which trade at roughly 1/1500th the price of Class A stock, climbed as much as 3.1% to $537.74. The shares were last at higher levels on May 2, 2025 - the day before Warren Buffett said he was stepping down after 60 years as chief executive.
Analyst reaction
Following the results, Keefe, Bruyette & Woods and UBS raised their share price forecasts for Berkshire. KBW analyst Meyer Shields described the quarter as "very solid" but maintained an "underperform" rating, citing macroeconomic uncertainty and pricing pressures in property and casualty insurance. UBS analyst Brian Meredith called the cash deployment "meaningful" and consistent with disciplined capital allocation, and maintained a "buy" rating.
Implications
The combination of renewed revenue growth, higher operating profit and large-scale capital deployment drove investor buying interest, propelling shares to levels not seen since before the leadership transition earlier in the year. At the same time, the results highlighted areas of cost pressure within the insurance businesses and the role of investment gains in the quarter's headline net income figure.