ii view: Berkshire head Greg Abel flexes spending muscle
Underperforming the S&P 500 index over the last year and yet holding investments including Apple and Chevron. Analyst Keith Bowman assesses prospects.
10th August 2026 16:18
by Keith Bowman from interactive investor
Photo: Cheng Xin/Getty Images.
Second-quarter results to 30 June
- Operating earnings up 16% to $12.98 billion (£9.6 billion)
- Net earnings attributable to shareholders up 107% to $25.7 billion (£19 billion)
- Cash held of $365.5 billion (£270.5 billion), down from $397.4 billion in Q1
- Share buyback of $4.5 billion (£3.3 billion)
ii round-up:
Relatively new Berkshire Hathaway Inc Class B (NYSE:BRK.B) CEO Greg Abel, who took over from Warren Buffett in January, showed signs of an increased desire to spend more of the company’s cash, which has fallen from a previous all-time high.
Second-quarter cash of $365.5 billion (£270.5 billion) as of late June declined from $397.4 billion as of late March and the end of Q1. Berkshire spent almost $20 billion during the period on investments such as Google owner Alphabet Inc Class A (NASDAQ:GOOGL), as well as buying back $4.5 billion of Berkshire’s own shares. That’s its biggest buyback since 2021 and contrasts with no buybacks during 2025.
Shares in the S&P 500 company rose 2% in post-results US trading having come into these latest numbers up by just over a tenth over the last year. Both the S&P 500 and Dow Jones 30 indices are up by just over a fifth in that time.
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Berkshire operates more than 90 businesses including insurance operations, railway and energy companies and manufacturing businesses. Buffett stepped down from running the company late last year, but is still its chair.
Second-quarter operating profits, excluding any investment gains or losses, rose 16% from a year ago to $12.98 billion (£9.6 billion), pushed by gains of around 25% for both energy and manufacturing to $891 million and $4.47 billion respectively.
BNSF railway-related profits also rose 6% to $1.55 billion, while other related profits, aided by currency moves, jumped to $1.27 billion from $32 million in Q2 2025.
Insurance underwriting profits fell 13% to $1.73 billion, with those for insurance-related investment income down 9% to $3 billion.
Berkshire profits including investment gains and losses more than doubled from a year ago to $25.7 billion (£19 billion). Berkshire investments continue to include Apple Inc (NASDAQ:AAPL), Bank of America Corp (NYSE:BAC), Chevron Corp (NYSE:CVX) and Coca-Cola Co (NYSE:KO).
ii view:
Conglomerate and investment company Berkshire Hathaway is tracked and invested in by large and small investors alike. Berkshire Hathaway shares trade on the New York Stock Exchange under the two classes of A and B shares, with the originally established ‘A’ class shares carrying considerably more voting power. New CEO Greg Abel joined Berkshire in 2000.
For some, the death of key Berkshire executive Charlie Munger in 2023 and the stepping back of legendary investor Warren Buffett may reduce the attractiveness of the company as an investment. The continued lack of a major acquisition, despite Berkshire’s cash mountain, could be frustrating some investors. Costs generally for businesses remain elevated, while earnings for insurance underwriting can prove volatile given potential exposure to events such as wildfires and earthquakes.
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More favourably, a new willingness to execute share buybacks potentially offers share price support going forward. Buffett’s judgement in making Abel CEO will have played its part. The group’s diversity regularly sees gains for one division countering falls in another, while the absence of any major business acquisitions likely underlines management’s patience in waiting for an appropriate value opportunity.
On balance, the stepping back of Buffett will likely mean some investors continue to reassess prospects. That said, Abel’s own experience, the hefty cash pile, and Buffett’s continuing guidance will likely keep many others staunchly loyal.
Positives:
- Diverse portfolio of industries and businesses
- Significant cash held
Negatives:
- Subject to macro-economic and geopolitical uncertainties
- An eventual full exit by Warren Buffett
The average rating of stock market analysts:
Hold
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