Warren Buffett's Berkshire Hathaway Just Exited Its Stake in T-Mobile and Loaded Up on an Artificial Intelligence (AI) Infrastructure Stock That's Risen 7,850% Since Its IPO
News Summary
Berkshire Hathaway recently filed its 13F report for the second quarter of 2025, disclosing significant changes in its equity holdings. During the quarter, the company made notable moves, completely exiting its over $1 billion stake in large mobile carrier T-Mobile. Berkshire initiated its T-Mobile position in late 2020 and saw returns exceeding 120% over five years. Despite T-Mobile's strong performance in 2025, with a stock price increase of about 16.5% and robust Q2 earnings and customer growth, Berkshire likely considered the stock fairly priced, trading at a forward price-to-earnings ratio over 23, which is high compared to historical levels and peers. The filing also revealed that Berkshire secretly purchased a stake in steel company Nucor in the first quarter, with the position valued at over $850 million by the end of Q2. Nucor has garnered interest from Artificial Intelligence (AI) investors due to its production of steel parts for data centers, and its stock has surged approximately 215% over the past five years and 27% year-to-date. Although Nucor's first-half earnings significantly declined and its Q3 guidance indicates "nominally lower" earnings, primarily due to margin compression in some segments, the market anticipates that President Donald Trump's 50% steel tariffs will benefit U.S. steel companies like Nucor, enabling them to raise prices more easily. Nucor currently trades at about 17.5 times forward earnings, which is not considered cheap within the steel sector. Buffett's team's interest in U.S.-based commodity companies may stem from a belief in increasing long-term demand and finite supply, a theme that Nucor appears to align with.
Background
Berkshire Hathaway regularly files 13F reports with the U.S. Securities and Exchange Commission (SEC), disclosing its quarterly equity holdings. These filings are widely viewed by the market as a crucial window into the investment strategies of Warren Buffett and his team, one of the world's most respected investors. Such disclosures reveal Berkshire's buying and selling activities over a three-month period, and any significant new positions or exits are particularly noteworthy given its recent tendency to accumulate cash rather than engage in major investments. In this disclosure, the T-Mobile exit was valued over $1 billion, while the Nucor position amounted to over $850 million. Currently, Artificial Intelligence (AI) infrastructure is experiencing explosive growth, leading to a surge in demand for data center construction and the materials (like steel) required for them, making related supply chain companies attractive investment themes. Concurrently, U.S. President Donald Trump's trade policies, particularly tariffs on critical industries like steel, continue to impact domestic industries, aiming to boost American manufacturing competitiveness and potentially reshape domestic steel market pricing dynamics.
In-Depth AI Insights
Is Berkshire's exit from T-Mobile solely a valuation play? - On the surface, Berkshire's exit from T-Mobile appears to be a standard valuation-driven move and profit-taking, as T-Mobile's stock price approached all-time highs and its forward P/E ratio exceeded industry averages. - However, considering Berkshire's long-term strategy in the telecommunications sector, this could also reflect a re-evaluation of the future growth potential of the 5G market, or a cautious stance on T-Mobile's ability to sustain high-profit margins and customer growth amidst intense competition. - Given the current macroeconomic environment and interest rate levels, the Buffett team might be more inclined to allocate capital to assets with greater certainty or those that align more closely with their definition of 'value,' and offer relatively lower volatility, rather than holding a high-growth tech/telecom stock whose valuation already fully reflects expectations. Why did Berkshire secretly build a position in Nucor, and what strategic intentions might be hidden behind this? - Berkshire's secret accumulation of Nucor shares, rather than immediate disclosure, itself suggests an expectation regarding market reaction, likely to avoid prematurely driving up the stock price. This aligns with Buffett's consistent quiet accumulation strategy. - The investment in Nucor is likely not just about optimism for AI infrastructure demand for steel. A deeper reason may lie in the recognition of the long-term strategic value of domestic U.S. manufacturing and critical commodities like steel. Under the Trump administration's 'America First' and tariff policies, the market position and pricing power of domestic steel producers are expected to be solidified. - Furthermore, this move aligns with Berkshire's recent investment patterns in other U.S.-based commodity companies, such as energy, indicating a potential strategy to build a portfolio centered on 'resource independence' and 'strategic security' in response to geopolitical uncertainties and potential supply chain risks. What are the long-term implications of Trump's steel tariff policy for Nucor's profitability and Berkshire's investment thesis? - The Trump administration's 50% steel tariff policy, regardless of whether it immediately and fully translates into Nucor's profits, provides a significant competitive advantage and pricing shield for U.S. domestic steel producers. This enables Nucor to more effectively fend off competition from imported steel and even more easily pass on increased costs to consumers. - For Berkshire, this policy not only protects Nucor's profitability but also strengthens its strategic position as a critical U.S. infrastructure supplier. This aligns with Buffett's preference for investing in companies with wide economic moats, or those that are regulated or supported by national policy, operating as monopolies or oligopolies. - In the long run, if the tariff policy remains stable, the certainty of Nucor's investment returns will significantly increase, making it a defensive yet strategically valuable component of Berkshire's portfolio, especially in the context of tightening global supply chains and escalating geopolitical risks.