Warren Buffett's Berkshire Hathaway closes above $1 trillion market value

By Jonathan Stempel

(Reuters) -Berkshire Hathaway's market value 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.

Buffett's company joined six other U.S. companies, all in or tied to the technology sector, valued at more than $1 trillion: Apple, Nvidia, Microsoft, Google parent Alphabet, Amazon.com 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.

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 U.S. Treasury bills, soared to $276.9 billion as of June 30. Berkshire has also slowed repurchases of its own stock.

"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.

Since the year Buffett took charge, Berkshire shares have gained more than 5,600,000%.

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."

(Reporting by Jonathan Stempel in New York, Editing by Franklin Paul, Nick Zieminski and Cynthia Osterman)