The market value of Berkshire Hathaway closed above $1 trillion for the first time on Wednesday, reflecting investor confidence in the conglomerate that Warren Buffett built over nearly six decades into what many consider a proxy for the American economy.
Berkshire joined six other US companies, all in or tied with the technology sector, above $1 trillion: Apple, Nvidia, Microsoft, Google parent Alphabet, Amazon and Facebook parent Meta Platforms.
Berkshire’s Class A shares closed up 0.7% at $696,502.02. The more widely held Class B shares rose 0.9% to $464.59.
Warren Buffett’s Berkshire joined six other US companies with a market value above $1 trillion. AP
Buffett, who turns 94 on Friday, has run Omaha, Nebraska-based Berkshire since 1965.
He transformed it from a failing textile company into a colossus with dozens of old-economy businesses such as Geico car insurance, the BNSF railroad, Berkshire Hathaway Energy, Brooks running shoes, Dairy Queen ice cream, Ginsu knives and the World Book encyclopedia.
The operating businesses generated $22.8 billion of profit in the year’s first half, up 26% from 2023.
Berkshire also has a huge stock portfolio even after selling tens of billions of dollars of Apple and Bank of America, its largest and until recently its second-largest stock holdings, in 2024.
The sales are a major reason Berkshire’s cash hoard, mainly in US Treasury bills, soared to $276.9 billion as of June 30.
“Buffett built Berkshire in a systematic, relatively low risk manner,” said Steve Check, president of Check Capital Management in Costa Mesa, California, which invests one-third of its $2 billion of assets in Berkshire stock and options. “As a huge conglomerate it will always have parts doing well.”
The $1 trillion valuation is based on Berkshire’s 553,234 Class A and 1,325,192,508 Class B shares outstanding as of July 23.
Berkshire has slowed its stock repurchases this year.
When the market value hit $1 trillion, Berkshire shares had gained more than 5,600,000% since the year Buffett took over.
Berkshire has a huge stock portfolio even after selling tens of billions of dollars of Apple and Bank of America. AFP via Getty Images
That’s about 20% annually, nearly double the annualized gain in the Standard & Poor’s 500 including dividends.
No single catalyst appeared to fuel Wednesday’s gain. Berkshire’s Class A shares are up 28% this year, while the S&P 500 excluding dividends is up 17%.
Buffett still owns more than 14% of Berkshire despite having donated more than half his shares to charity since 2006.
His $146 billion fortune makes him the world’s sixth-richest person, Forbes magazine said on Wednesday.
Check said he became a grandfather on Aug. 16, and bought 100 Berkshire Class B shares for his grandson Zealand that day.
“Investors should certainly not jump in because the market cap hit $1 trillion, and the stock is perhaps as fully priced as it has been since before the 2008 financial crisis,” he said. “It is a good investment for someone with a 10-year horizon.”
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