Berkshire Hathaway Reaches $1 Trillion Market Value

By Jonathan Stempel

(Reuters) – Berkshire Hathaway’s market value surpassed $1 trillion for the first time on Wednesday, showcasing investor confidence in the conglomerate built by Warren Buffett over nearly six decades, often viewed as a proxy for the American economy.

Buffett’s company now joins six other U.S. firms in or connected to the technology sector valued over $1 trillion: Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), Google parent Alphabet (NASDAQ:GOOGL), Amazon.com (NASDAQ:AMZN), and Facebook parent Meta Platforms (NASDAQ:META).

Berkshire’s Class A shares increased by 0.7% to $696,502.02, while Class B shares rose 0.9% to $464.59. Buffett, who will turn 94 on Friday, has led Omaha, Nebraska-based Berkshire since 1965, transforming it from a struggling textile business into a giant with various established operations including Geico car insurance, the BNSF railroad, Berkshire Hathaway Energy, Brooks running shoes, Dairy Queen, Ginsu knives, and the World Book encyclopedia.

The operating businesses brought in $22.8 billion in profit in the first half of the year, marking a 26% increase from 2023. Despite selling tens of billions of dollars worth of Apple and Bank of America stocks in 2024, Berkshire maintains a substantial stock portfolio.

These sales significantly increased Berkshire’s cash reserves, primarily in U.S. Treasury bills, to $276.9 billion as of June 30, and the company has also reduced its stock repurchase activities.

“Buffett built Berkshire in a systematic, relatively low-risk manner,” said Steve Check, president of Check Capital Management in Costa Mesa, California. “As a huge conglomerate, it will always have parts doing well.”

The $1 trillion valuation is calculated based on Berkshire’s 553,234 Class A and 1,325,192,508 Class B shares outstanding as of July 23. When Buffett took the helm, Berkshire shares have soared over 5,600,000%, translating to an average annual growth rate of about 20%, nearly double the S&P 500’s annualized gain.

There was no single catalyst for Wednesday’s increase. Year-to-date, Berkshire’s Class A shares are up 28%, outpacing the S&P 500’s 17% rise.

Despite donating more than half his shares to charity since 2006, Buffett still holds over 14% of Berkshire, with a fortune valued at $146 billion, making him the world’s sixth-richest person according to Forbes.

Check noted that investors shouldn’t rush to acquire shares simply because of the $1 trillion market cap, suggesting that the stock may be fairly priced compared to pre-2008 crisis levels. He advised it remains a good investment for those with a long-term approach.