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▲ Berkshire Hathaway (BRK.A·BRK.B), Warren Buffett/AI generated image
Berkshire Hathaway (BRK.A·BRK.B) has successfully rebounded its stock price over the past month, re-emerging as a defensive stock alternative amidst slowing enthusiasm for the Magnificent Seven.
According to investment specialized media Barron's on July 2 (local time), Berkshire Hathaway's stock price showed an upward trend over the past month. Barron's analyzed that expectations for an increase in book value in the second quarter and a shift in funds from high-growth tech stocks to defensive stocks served as the backdrop for the stock's rebound. Berkshire's annual profit flow exceeds $40 billion, and its cash and cash equivalents are estimated to be close to $400 billion.
Berkshire Class A shares rose approximately 8% over the past month, trading at $758,400, and Class B shares also rose approximately 8% over the same period, reaching $505.59. However, the year-to-date increase for both stocks remained less than 1%. Over the same period, the S&P 500 Index lagged by approximately 10 percentage points, leaving a debate among long-term investors regarding the sustainability of the rebound.
Barron's estimated that Berkshire's second-quarter shareholders' equity, or book value, increased by approximately 3% from the first quarter, reaching about $522,000 per Class A share. The current stock price trades at approximately 1.45 times its book value. This is similar to the average of recent years but falls short of approximately 1.8 times when Class A shares exceeded $800,000 in May 2025.
The key variable for the stock's sluggish performance is the succession plan after Warren Buffett. Buffett announced that he would step down as CEO at the end of the year, just before the 2025 annual shareholders' meeting, and currently retains the chairman position. Since then, Berkshire's stock price has lagged the S&P 500 Index by approximately 40 percentage points. Barron's pointed out that the so-called Buffett premium, which was attached to the stock price in the past, has disappeared, and investors' wait-and-see attitude towards new CEO Greg Abel has also played a role.
The improvement in second-quarter book value reflected both operating profit and unrealized gains from a stock portfolio exceeding $300 billion. Notably, Apple (AAPL), the largest holding, rose 14% in the second quarter, and other major holdings such as The Coca-Cola Company (KO), American Express (AXP), and Bank of America (BAC) also increased. However, investors are expected to closely check the scale of share repurchases in the second-quarter earnings, which are expected around August 1. Berkshire's share repurchases in the first quarter of this year amounted to only $235 million, whereas it bought back over $25 billion in 2021.
[Article Key Summary]
-Berkshire Hathaway's stock price rebounded by approximately 8% over the past month, but its year-to-date increase remained less than 1%.
-The second-quarter book value was estimated to have increased by approximately 3% from the first quarter, reaching about $522,000 per Class A share.
-Since Warren Buffett's announcement of his resignation as CEO, Berkshire's stock price has lagged the S&P 500 Index by approximately 40 percentage points, and the second-quarter earnings and share repurchase scale, expected around August 1, have emerged as the next variables.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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