Berkshire Hathaway's notable absence in purchasing one specific stock during Q2
Berkshire Hathaway's Q2 2025 Movements: Caution Prevails Amid High Valuations
Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, has chosen not to buy shares of his own company in Q2 of 2025, citing concerns over the valuation of Berkshire's stock. This strategic decision comes amidst a massive cash reserve of $344 billion, a 10% drop in Berkshire's share price from its peak this year, and an excise tax on stock buybacks that went into effect in 2023.
In its regulatory filing, Berkshire Hathaway disclosed that it was a net seller of stocks for the 11th consecutive quarter, selling $6.9 billion and buying only $3.9 billion in Q2 2025. The company's cash pile actually increased to an all-time high, reflecting Buffett's caution in deploying capital amidst high valuations in both public and private markets.
Buffett's cautious stance extended to avoiding increasing positions in other publicly owned stocks that had suffered impairments or were seen as less attractive, such as Kraft Heinz, where Berkshire wrote down $5 billion, and American Express, where no meaningful new purchases were made.
The decision to avoid buying back Berkshire stock also came as Buffett was preparing to step down as CEO, which has contributed to a "loss of a Buffett premium" reflected by Berkshire's shares lagging the broader market recently. However, Buffett expressed his confidence in his successor, Greg Abel, and does not plan on selling any shares.
Despite Buffett's decision, Berkshire Hathaway's stock valuation may still look high at first glance. Long-term investors, however, may consider it attractive due to Berkshire's growth prospects. Ordinary investors are not affected by the excise tax on stock buybacks.
It is unlikely that Berkshire Hathaway put more money in a stock that has lost it so much money, such as Kraft Heinz. Similarly, it is unlikely that Berkshire Hathaway initiated new positions in stocks for which it recently exited, such as Citigroup and Nu Holdings.
Buffett, who will step down as CEO at the end of this year, still plans to be actively involved as chairman of the board. Despite not buying Berkshire Hathaway shares these days, it doesn't mean it's not a good pick for other investors. Berkshire Hathaway's stocks (BRK.A and BRK.B) have experienced a decrease of 3.04% and 2.85% respectively. Buffett mentioned the excise tax during Berkshire's annual shareholder meeting in May 2025, stating it hurts some of Berkshire's investee companies.
Buffett remains confident in Abel as CEO, stating that Berkshire's prospects will be better with him at the helm. Buffett's strategic approach to Berkshire Hathaway's equity holdings in Q2 2025 reflects a careful and calculated approach to investing, even as he prepares to step down as CEO.
- Warren Buffett's decision not to buy shares of Berkshire Hathaway in Q2 2025 is a reflection of his cautious stance towards finance, as he expressed concerns over the valuation of the company's stock.
- Berkshire Hathaway's choice to sell more stocks than they bought in Q2 2025 and increase their cash pile is indicative of their careful approach to money management and risk assessment in both public and private markets.
- Buffett's strategy to avoid increasing positions in stocks like Kraft Heinz and American Express, or re-entering those they recently exited such as Citigroup and Nu Holdings, highlights his discerning eye for finance and business opportunities.
