Berkshire’s stock gains as AI worries depress Wall Street
News Summary
Berkshire Hathaway's Class A and B shares rose 4.5% this week following a strong third-quarter earnings report. This contrasted with a broader market downturn driven by concerns over AI stock valuations and U.S. economic weakness, with the Nasdaq experiencing its worst weekly decline since April. Berkshire's operating profits for its wholly-owned companies increased by 34% to nearly $13.5 billion in Q3, with insurance underwriting income soaring by 200%. Despite robust performance, Warren Buffett did not authorize stock buybacks, indicating he does not view Berkshire shares as significantly undervalued. The company’s cash reserves reached $381.7 billion by September 30. Warren Buffett is expected to deliver a significant message, possibly a farewell, on November 10th, ahead of his planned step-down as CEO at year-end, though he will remain chairman. Greg Abel is slated to take over as CEO and will write the annual letter to shareholders. Berkshire likely sold additional Apple and Bank of America shares in Q3. Furthermore, Berkshire is preparing another yen bond sale, signaling continued investment in Japanese trading houses. Buffett also issued a warning about fraudulent AI-generated videos impersonating him, calling scamming “the growth industry of all time.”
Background
Published in November 2025, this article details Berkshire Hathaway's performance, strategy, and leadership changes amidst broader market anxieties, particularly regarding AI stock valuations and U.S. economic weakness. Berkshire is known for its diversified investment portfolio and value investing philosophy, often demonstrating relative resilience during periods of market volatility. Warren Buffett, the iconic CEO of Berkshire Hathaway, has been steadily increasing stakes in Japan's five major trading houses (Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo) since 2019. He is renowned for his prudent capital allocation and focus on intrinsic business value.
In-Depth AI Insights
What do Berkshire's cash reserves and capital allocation strategy truly reflect, especially in the current market context? - Berkshire's staggering $381.7 billion cash pile, far exceeding typical explanations for defensive assets, likely signals Warren Buffett's deep-seated concerns about overall U.S. market valuations, particularly amidst an AI-driven tech stock bubble. - The refusal to buy back shares despite strong operating profits and market interest in Berkshire's stock, coupled with continued reductions in long-held positions like Apple and Bank of America, is more than just profit-taking. It represents a strategic wait for potentially severe future investment opportunities, implying a significant market correction where a large cash position would be a substantial advantage. - The ongoing investment in Japanese trading houses, financed by yen bond sales, underscores Berkshire's global quest for value, especially as Western markets appear overvalued. The Japanese market likely offers a risk-reward profile Buffett finds more attractive. What does Warren Buffett's impending departure as CEO signify for Berkshire's long-term investment philosophy and market confidence? - Buffett's anticipated