Warren Buffett’s Berkshire Hathaway Tops $1 Trillion In Market Value

Berkshire’s market value climbed by roughly 20% a year from 1965 through last year.

Berkshire Hathaway Inc. made history by becoming the first non-tech company in the US to surpass $1 trillion in market value. This milestone was achieved as shares of Warren Buffett’s conglomerate surged by 0.8% on Wednesday, pushing its market capitalization above the trillion-dollar mark for the first time. The stock’s rally this year can be attributed to strong insurance results and positive economic outlook.

Berkshire Hathaway, headquartered in Omaha, Nebraska, now joins a select group of companies, including tech giants like Alphabet Inc., Meta Platforms Inc., and Nvidia Corp., that have surpassed the trillion-dollar mark.

“Berkshire has taken the slower but more steady approach,” said Steve Check, founder and chief investment officer of Check Capital Management. Berkshire is the largest holding in his firm’s $2 billion asset portfolio. “It’s more challenging to make money the traditional way.”

Add image caption here

Berkshire’s performance this year has outpaced the S&P 500, with a 30% increase compared to the market benchmark’s 18% rise. The company’s success can be attributed to Warren Buffett’s strategic leadership in transforming Berkshire Hathaway from a struggling textile manufacturer into a diversified business empire.

Buffett, in partnership with Charlie Munger, shaped Berkshire Hathaway’s growth over the years, with the company’s market value increasing by approximately 20% annually from 1965 to last year – almost double the S&P 500’s yearly return during the same period.

Berkshire’s diverse portfolio of businesses, ranging from Pilot Travel Centers LLC to Dairy Queen and Duracell, positions it well for continued success amid growing economic optimism and expectations of interest rate cuts by the Federal Reserve.

While Berkshire’s market capitalization has surged by over $200 billion this year, some analysts remain cautious due to the stock’s overbought status. However, Bloomberg Intelligence analyst Matthew Palazola highlights Berkshire’s resilient portfolio as a key strength.

Lower interest rates may impact Berkshire’s returns, especially as the company holds a significant cash reserve of around $276.9 billion. Buffett’s decision to reduce the firm’s stake in Apple Inc. and Bank of America Corp. reflects a strategic move to mitigate risks and optimize returns.

(This article is based on a syndicated feed and has not been edited by the NDTV staff.)