Berkshire Hathaway has spent much of the past year as a quiet underperformer \u2014 trailing the S&P 500 by a wide margin while Wall Street chased artificial intelligence and mega-cap tech. But something has shifted in recent weeks. As the broader market grows increasingly expensive and a new CEO starts writing his own chapter, BRK.B is drawing fresh attention from investors who want quality at a reasonable price.<\/p>\n\n\n\n
Here is what the numbers say, and why it matters.<\/p>\n\n\n\n
The most important change at Berkshire in 2026 is not a balance sheet line \u2014 it is leadership. Greg Abel officially took the reins from Warren Buffett on January 1, 2026, and he has wasted no time proving he can deploy capital decisively.<\/p>\n\n\n\n
In the span of just a few weeks, Abel closed the $9.7 billion acquisition of OxyChem \u2014 Occidental Petroleum’s chemicals arm \u2014 made a $1.8 billion strategic investment in Japanese insurer Tokio Marine, and then announced a $6.8 billion all-cash takeover of homebuilder Taylor Morrison. He followed that with a $10 billion equity stake in Alphabet. Four moves, roughly $28 billion deployed, in under six months.<\/p>\n\n\n\n
Buffett himself appeared bullish on his successor’s instincts. “Greg did that faster than I could have done it, smoother than I could have done it,” Buffett told CNBC in June.<\/p>\n\n\n\n
The Taylor Morrison acquisition is particularly telling about how Abel intends to run the conglomerate. Rather than taking a partial stake in a publicly listed homebuilder, he chose to privatize one entirely \u2014 a pattern also visible in the OxyChem deal. Abel seems less interested in minority equity exposure and more inclined toward full ownership of businesses with durable cash flows. That signals a meaningful shift in capital allocation philosophy from his predecessor.<\/p>\n\n\n\n
Berkshire’s Q1 2026 results \u2014 the first quarterly report under Abel \u2014 told a story of solid operational strength rather than dramatic acceleration.<\/p>\n\n\n\n
Operating earnings came in at $11.35 billion, up nearly 18% from $9.64 billion in the same quarter a year earlier. Revenue rose 4.4% year over year to $93.6 billion, while net income attributable to shareholders more than doubled, climbing to $10.1 billion from $4.6 billion in Q1 2025.<\/p>\n\n\n\n
The insurance segment continued to be a key earnings engine. Insurance underwriting contributed $1.72 billion \u2014 a 28% jump year over year \u2014 driven by disciplined risk selection across Berkshire’s sprawling insurance operations. BNSF, the railroad business, added $1.38 billion. Berkshire Hathaway Energy<\/a> contributed $1.11 billion.<\/p>\n\n\n\n Not everything was clean. GEICO, the company’s flagship auto insurer, reported a 34% decline in earnings \u2014 a notable soft spot in an otherwise strong quarter. The result came in slightly below analyst expectations of $11.56 billion, per FactSet.<\/p>\n\n\n\n But the headline that matters most to long-term investors is the cash position: as of March 31, 2026, Berkshire’s cash and short-term investments had swelled to a record $397 billion, up from $373 billion at the end of 2025. That war chest isn’t just a balance sheet curiosity. In a high-rate environment, it is generating meaningful returns. Shareholders’ equity stood at $729.4 billion at quarter-end.<\/p>\n\n\n\n Here is where the investment argument gets interesting.<\/p>\n\n\n\n The S&P 500<\/a> currently trades at roughly 32 times forward earnings, with the Shiller CAPE ratio sitting above 41 \u2014 a level historically associated with stretched valuations. Berkshire, by contrast, trades at approximately 1.45 times book value, close to its 10-year historical average.<\/p>\n\n\n\n On a price-to-earnings basis, BRK.B’s trailing P\/E has declined to around 14, below its 12-month average of roughly 15.4. The stock’s 52-week range runs from $455.19 to $516.85. As of June 24, it is trading near $494 \u2014 comfortably in the middle of that band, with Wall Street’s consensus price target sitting at approximately $520.<\/p>\n\n\n\n The 10-year total return for BRK.B stands at 237%, and the 20-year figure is 674%. Over two decades, the stock has compounded at roughly 10.7% annually. For context, BRK.B’s 5-year price CAGR is approximately 10%. These are not venture-capital-style returns, but they are highly consistent, with notably low volatility \u2014 the stock’s beta is just 0.14.<\/p>\n\n\n\n Over the past 12 months, BRK.B has returned roughly 0%, while the S&P 500 has gained around 22%. That gap is significant, and it has frustrated some shareholders. The primary explanation is structural: Berkshire has minimal exposure to artificial intelligence, which has been the dominant driver of the broader market’s ascent.<\/p>\n\n\n\n That same dynamic, however, is what makes the relative valuation case compelling to contrarians. The S&P 500’s gains are heavily concentrated \u2014 the ten largest index constituents account for nearly 40% of its total weight. Berkshire, by contrast, generates cash from insurance, energy, rail, manufacturing, and consumer businesses. Its float \u2014 the pool of premium money held before claims are paid \u2014 stood at $176.9 billion as of March 31, 2026, a structural advantage that few competitors can replicate.<\/p>\n\n\n\nThe Valuation Case: Cheap Relative to the Market<\/strong><\/h2>\n\n\n\n
The Underperformance Gap: A Risk or an Opportunity?<\/strong><\/h2>\n\n\n\n