Reports emerged Saturday that Berkshire Hathaway posted a blockbuster second quarter under new CEO Greg Abel, but the real headline was what he did with the money. Strength across energy, railroad, and manufacturing businesses drove a 16% jump in operating earnings , while Berkshire ended a 14-quarter streak of net selling by purchasing $23.5 billion in stocks, including a $10 billion investment in Alphabet . For a company that sat on nearly $400 billion in cash under Warren Buffett, this is a seismic shift in posture — and shareholders need to decide whether Abel's aggressive capital deployment will earn returns worthy of the risk.
A Beat That Proved the Business Runs Without Buffett
Berkshire beat expectations with actual EPS of $6.02 versus an estimated $5.13 . Manufacturing, service, and retailing earnings jumped 24% to $4.47 billion, while Berkshire Hathaway Energy's profit surged 27% . Insurance was a weak spot: underwriting earnings fell 13% to $1.73 billion, while insurance investment income declined 9% . The operating strength matters because it proves Abel's inherited empire can generate cash even without Buffett's hand on the tiller.
A $23 Billion AI Wager Rewrites the Berkshire Playbook
Berkshire bought roughly 40 million additional Alphabet shares in Q1 for about $13 billion, then negotiated a $10 billion private placement in early June . Alphabet is now among Berkshire's five largest equity holdings alongside American Express, Apple, Bank of America, and Coca-Cola . The purchase signals growing conviction in Alphabet's position at the center of the AI boom — and suggests Buffett's successor is willing to commit significant sums to tech . That's a philosophical departure: Berkshire is now betting that Alphabet's projected $200 billion in 2026 capital spending will pay off.
The Cash Pile Shrinks — But $365 Billion Still Provides a Cushion
Cash holdings shrank to $365.5 billion from nearly $400 billion at the end of March . The company also repurchased $4.5 billion of its own stock and became a net buyer of equities . Even after the spending spree, the remaining cash dwarfs most companies' entire market capitalizations — giving Abel room to pounce on downturns or deals.
Stock Lags the Market Despite Strong Fundamentals
Shares are up just 3% year-to-date, underperforming the S&P 500's 13% gain, though the stock has risen 9% over the last three months . At $520.80 and a price-to-earnings ratio of 15.28 , Berkshire trades at a discount to the broader market. The question now: will Abel's willingness to spend — rather than hoard — finally close that gap, or does the shift into AI-heavy tech introduce a risk profile Berkshire investors never signed up for?