Berkshire Hathaway has achieved a significant milestone, closing with a market value exceeding $1 trillion for the first time on Wednesday. This notable achievement highlights investor confidence in Warren Buffett’s conglomerate, which has become a benchmark for the American economy over nearly 60 years.
With this milestone, Berkshire Hathaway joins an exclusive list of U.S. companies valued at over $1 trillion, including technology giants Apple, Nvidia, Microsoft, Alphabet (Google’s parent company), Amazon, and Meta Platforms.
On the trading day, Berkshire’s Class A shares closed at $696,502.02, up by 0.7%, while the more commonly traded Class B shares increased by 0.9% to $464.59.
Buffett, who will turn 94 on Friday, has led Berkshire Hathaway since 1965, transforming it from a struggling textile manufacturer into a vast conglomerate with interests in diverse industries. The company now includes major entities such as Geico, BNSF Railway, Berkshire Hathaway Energy, Brooks Running, Dairy Queen, and World Book.
In the first half of this year, Berkshire’s operating businesses contributed $22.8 billion in profit, reflecting a 26% increase compared to the same period in 2023. Despite significant sales of its holdings in Apple and Bank of America earlier this year, Berkshire’s cash reserves have surged to $276.9 billion, primarily invested in U.S. Treasury bills. The company has also reduced its stock repurchases.
Steve Check, president of Check Capital Management, noted that Buffett’s methodical approach to building Berkshire has paid off, contributing to its continued success. “As a huge conglomerate, it will always have parts doing well,” Check said.
The $1 trillion valuation is based on the number of Berkshire’s outstanding shares: 553,234 Class A and 1,325,192,508 Class B shares as of July 23. Since Buffett took the helm in 1965, Berkshire’s share value has skyrocketed more than 5,600,000%, averaging a nearly 20% annual return—substantially outperforming the S&P 500.
While no single factor drove the recent valuation surge, Berkshire’s Class A shares have risen 28% this year, compared to a 17% increase in the S&P 500 excluding dividends. Buffett, who still holds over 14% of Berkshire’s shares despite donating over half of his holdings to charity, remains the world’s sixth-richest person with a $146 billion fortune.
Steve Check cautioned investors about jumping in solely because of the $1 trillion market cap, suggesting the stock might be fully priced relative to historical standards. “It is a good investment for someone with a 10-year horizon,” Check advised.
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