Warren Buffett served as CEO of the Berkshire Hathaway(NYSE: BRKA)(NYSE: BRKB) holding company from 1965 until the end of 2025, when he stepped down and handed the reins to his chosen successor, Greg Abel. Buffett will continue as chairman of the board, so he’s not completely out of the picture.
During Buffett’s six decades as CEO, Berkshire shares generated a compound annual return of 19.7%, crushing the S&P 500(SNPINDEX: ^GSPC)which earned an average return of 10.5% annually over the same period. In dollar terms, a $1,000 investment in Berkshire in 1965 would have grown to a staggering $48.4 million by the end of 2025, while the same investment in the S&P 500 would have been worth just $399,702.
Will AI create the world’s first billionaire? Our team just published a report on a little-known company called “Indispensable Monopoly” that provides critical technology that both Nvidia and Intel need. Continue “
Buffett returned a full truck money to shareholders through share buybacks during his final years as CEO, and in an interview earlier this month, Abel announced that he is following in his predecessor’s footsteps. Here’s why this is great news for Berkshire stock.
Image source: The Motley Fool.
Berkshire Hathaway was a struggling textile manufacturer when Buffett acquired a majority stake in 1965. Realizing that its core business simply wasn’t viable, he turned it into a holding company for his various investments. It is now a $1 trillion conglomerate with numerous wholly owned subsidiaries, a portfolio of $306 billion in publicly traded stocks, and a whopping $373 billion in cash.
Berkshire owns insurance companies such as GEICO Insurance, General Re and National Indemnity Company, as well as utility companies such as PacifiCorp and Northern Natural Gas. It also owns logistics companies such as BNSF Railway, which operates one of the largest freight rail networks in the United States. These subsidiaries produce a large amount of cash flow, which funds other acquisitions and investments for Berkshire.
Berkshire invests much of that money in the public markets. Through its $306 billion stock portfolio, the conglomerate owns minority stakes in dozens of different companies, including media giants like HeNew York Times Co.restaurant chains like Domino’s Pizzapayment powers like Visaand technology titans like Apple(NASDAQ:AAPL).
Apple is actually Berkshire’s largest holding. Buffett invested about $38 billion in the iPhone maker between 2016 and 2023, and the stake was worth a staggering $170 billion by 2024. To cash in on some of those gains and reduce risk, Buffett, Abel and their respective teams have gradually sold about 75% of Berkshire’s position in Apple since then, but it still represents 18.6%. (or $57 billion) of the conglomerate’s portfolio.
The sales have added to Berkshire’s growing pile of cash, and it’s becoming increasingly difficult for the company’s portfolio managers to find new investment opportunities that are big enough to really move the needle. To put it in perspective, 477 of the 500 companies in the S&P 500 index are worth less than Berkshire’s $373 billion cash position.
Buffett often returned cash to shareholders when he felt Berkshire couldn’t put it to good use. Companies typically do this by paying dividends or buying back shares, but Buffett preferred the latter for two reasons.
First of all, buybacks are very flexible. Buffett could authorize them at his discretion, as long as Berkshire had at least $30 billion in cash on hand. Second, investors don’t realize the financial benefits of buybacks until they sell their Berkshire shares, so they can defer tax liability until a time they choose. Dividends, on the other hand, provide a stream of taxable income.
Buffett authorized a whopping $77.8 billion in buybacks between 2018 and mid-2024, roughly double what Berkshire has invested in a single company. However, there were no buybacks in the second half of 2024 or 2025. This is likely because Buffett wanted to leave Berkshire with as much cash as possible to give Abel the best chance of success as the new CEO.
BRK.A Share buyback data (quarterly) from YCharts.
But in an interview with CNBC earlier this month, Abel said buybacks have officially resumed. He did not provide any figures, but it is great news for shareholders who will now see the value of their holdings increase. It will also allow Berkshire to reduce its considerable cash position.
There’s no guarantee Abel will devote as much money to buybacks as Buffett did, but if the conglomerate continues to struggle to find suitable investment opportunities, I would expect an increasing amount of money to flow to investors from here.
Before you buy shares in Berkshire Hathaway, consider this:
He Varied and Dumb Stock Advisor The analyst team has just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you would have $508,877!* Or when NVIDIA made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $1,115,328!*
Now, it is worth noting stock advisor The total average performance is 936.%: An overwhelming outperformance of the market compared to the S&P 500’s 189%. Don’t miss the latest Top 10 list, available with Stock Advisorand join an investing community created by individual investors for individual investors.
See the 10 actions »
*Stock Advisor returns starting March 19, 2026.
Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool holds positions and recommends Apple, Berkshire Hathaway, Domino’s Pizza, The New York Times Co. and Visa and is short Apple stock. The Motley Fool has a disclosure policy.
Greg Abel Just Taken a Page Out of Warren Buffett’s Playbook, and It’s Great News for Berkshire Hathaway Stock was originally published by The Motley Fool
