Berkshire Up Nearly 8% in Recent Months as Defensive Appeal Attracts Rotation Flows
Taylor Wilson
Berkshire Hathaway's Class A shares gained nearly 8% over the past month to $758,400, driven by a rotation out of the Magnificent Seven into defensive assets. Yet the stock trails the S&P 500 by roughly 10 percentage points year-to-date as the "Buffett premium" fades.
Why is money suddenly flowing into Berkshire?
The Magnificent Seven and momentum stocks are under pressure; capital is rotating into defensive names. This means → Berkshire didn't get stronger — risk-off demand pushed the money over.
The company earns over $40 billion a year in operating income and holds nearly $400 billion in cash and equivalents. In plain terms = it makes a lot and hoards even more, so when markets get nervous it becomes a parking lot.
Class B shares rose nearly 8% to $505.59 over the same period, tracking Class A in lockstep — both institutional and retail buyers are moving in.
How much did book value grow — and is the stock expensive?
*Barron's* estimates second-quarter book value (shareholders' equity) rose about 3% from Q1, putting Class A per-share book at roughly $522,000.
The improvement came from two sources: operating profit, and gains in a stock portfolio worth over $300 billion — top holding Apple climbed 14% in Q2, while Coca-Cola, American Express, and Bank of America all posted positive returns.
Price-to-book now sits at about 1.45×, in line with recent-year averages but below the roughly 1.8× peak hit in May 2025. This means → on a book-value basis, the valuation has returned to a "not expensive" range.
It rallied for a month — why is it still trailing the market year-to-date?
Both Class A and B are up less than 1% for the year, lagging the S&P 500 by about 10 percentage points. Since the 2025 annual meeting — when Class A touched above $800,000 — Berkshire has underperformed the S&P 500 by nearly 40 percentage points.
*Barron's* attributes this to three overlapping factors: the unwinding of a previously elevated "Buffett premium," a wait-and-see stance toward new CEO Greg Abel, and uncertainty from Buffett himself stepping down as CEO at the end of 2025 while remaining chairman.
This reflects a market repricing Berkshire for a "post-Buffett era" — once the halo fades, the company has to justify its valuation on fundamentals, not faith.
What's the single most important thing in the Q2 report?
The key number is share buybacks. In Q1 the company repurchased only $235 million — well below expectations. It announced a restart in early March and CEO Abel flagged it publicly on CNBC, but in practice the company bought only on a single day in early March and then stopped through mid-April.
In plain terms = management talked the talk but didn't walk it, and the market noticed.
For context, full-year 2021 buybacks exceeded $25 billion. At Berkshire's current market cap of over $1 trillion, it could theoretically retire about $50 billion a year — roughly 5% of its value. This means → if Q2 data shows the company buying aggressively near the $700,000 Class A level, that's a concrete signal management thinks the stock is cheap enough.
Content is for reference only, not financial advice.