For 14 straight quarters, Berkshire Hathaway did something almost un-Buffett-like: it sat on its hands. Warren Buffett, the man who built an empire on the principle of buying when others are fearful, spent three and a half years quietly selling more stock than he bought, letting cash pile up to a record $397.4 billion by March. Critics muttered about a company that had grown too big to find anything worth owning. Then, in the second quarter, the selling just... stopped.
Greg Abel, who took the CEO chair from Buffett at the start of 2026, put the brakes on the streak and reversed it hard. Berkshire became a net buyer of equities for the first time since early 2023, snapping up close to $20 billion more stock than it sold. Cash reserves fell from $397.4 billion to $365.5 billion. It's not a fire sale of the cash pile — Berkshire still has more dry powder than most countries have GDP — but for a company that had become synonymous with hoarding, the shift in direction is the story.
The Alphabet Bet Nobody Saw Coming
The headline purchase is a $10 billion direct stake in Alphabet, negotiated in a private placement to help fund Google's AI infrastructure buildout. Combined with earlier open-market purchases, Berkshire's Alphabet position ballooned 224% in a single quarter — from roughly 18 million shares in December to nearly 58 million by the following spring — pushing the total stake above $31 billion. That's enough to make Alphabet Berkshire's fifth-largest equity holding, behind Apple, American Express, Coca-Cola and Bank of America, and enough to raise eyebrows given Buffett's decades-long allergy to tech stocks he didn't fully understand.
Buffett himself cleared up any confusion about whose idea this was. In a July interview with CNBC, he said flatly that he — not Abel — initiated the Alphabet purchase, and admitted that waiting this long to buy into the company had been a mistake. It's a rare moment of public self-correction from a man not known for them. He also added, almost as a hedge, that Alphabet still isn't among his four or five favorite Berkshire businesses — the kind of qualifier that tells you this is a value bet on a cheap-looking mega-cap, not a conversion to tech evangelism.
Buybacks Are Back, Even If Investors Wanted More
Abel also leaned harder into share repurchases, spending $4.5 billion buying back Berkshire stock in the quarter — a nearly twentyfold jump from the token $235 million spent in the first quarter, and the largest buyback total in five years. Barron's estimates the pace continued into July, with another $3.4 billion or so repurchased before Berkshire shares rallied late in the month.
Even so, some Buffett-watchers came away mildly underwhelmed. Based on a filing tied to Buffett's annual charitable donations, analysts had penciled in repurchases somewhere between $5 billion and $11 billion. What Berkshire actually delivered landed at the low end of that range. Buyback math at Berkshire has never been about hitting a target, though — the company's long-standing rule is that Abel and Buffett only repurchase stock when they believe it's trading below intrinsic value, full stop. If the number came in lighter than hoped, that's arguably a statement about where they think the stock sits, not a lack of ambition.
Wall Street's read on the shift has been largely favorable. Gabelli Funds portfolio manager Macrae Sykes told CNBC that meaningful repurchases give shareholders confidence that some of the best capital allocators around see value at current levels — a vote of confidence that matters more coming from a firm that has spent three years being criticized for sitting on the sidelines.
The Numbers Behind the Headline
Strip away the portfolio moves and the underlying business had a strong quarter. Operating earnings climbed 16% to $12.98 billion, from $11.16 billion a year earlier, powered by a 27% jump at Berkshire Hathaway Energy, a 24% increase in the manufacturing, service and retailing segment, and steady 6% growth at BNSF railroad. Net earnings more than doubled to $25.67 billion, though the jump was driven largely by $12.68 billion in investment gains — including $10.9 billion in unrealized gains on the equity portfolio — a number Berkshire itself cautions shouldn't be read as an indicator of underlying business performance.
The one soft spot: insurance. Underwriting earnings fell 13% to $1.73 billion, with GEICO's underwriting profit dropping a sharp 45%, and investment income from the insurance operations slipped 9%. For a conglomerate whose insurance float has historically been the engine funding everything else, that's the line worth watching next quarter.
Berkshire also closed two acquisitions in the first half — homebuilder Taylor Morrison and chemical maker OxyChem — for a combined $16.2 billion, adding operating businesses to the portfolio alongside the equity purchases.
So, Is It Time to Buy Berkshire?
Here's the tension at the heart of this story: Berkshire stock is up just 3% this year, badly trailing the S&P 500's 13% gain, even as the company just posted its most aggressive capital deployment in years. The market, so far, isn't fully rewarding the shift from hoarder to buyer.
That gap is either an opportunity or a warning, depending on how much faith you still have in the Buffett playbook now that Buffett himself is chairman rather than CEO. The bull case is straightforward: a company with a fortress balance sheet, still-growing operating earnings, and a management team finally willing to use $365 billion in cash is not a company that should trade at a discount to the market for long. The more cautious case is that Abel's early moves — a concentrated bet on Alphabet, a bigger stake in Delta Air Lines, two sizable acquisitions — represent a genuinely different risk profile than the Berkshire investors got used to, and it will take more than one quarter to know whether the new captain steers as well as the old one did.
Berkshire didn't get to $365 billion in spare cash by rushing. The fact that it's finally spending some of it is the headline. Whether Abel spends it as well as Buffett did is the question that actually decides whether this stock is a buy.
This article is for informational purposes only and does not constitute investment advice.
