Berkshire Hathaway Inc. became the first US company outside of the tech sector to surpass $1 trillion in market value.

Shares of Warren Buffett’s conglomerate rose as much as 0.8% on Wednesday to push its market capitalization above the trillion-dollar mark for the first time. The stock has rallied this year on strong insurance results and economic optimism. The Omaha, Nebraska-based company joins the ranks of a small group to crack the milestone, dominated by technology giants like Alphabet Inc., Meta Platforms Inc. and Nvidia Corp.  

“Berkshire has done it the slower, but more sure, way,” said Steve Check, the founder and chief investment officer of Check Capital Management. His firm has about $2 billion in assets under management, with Berkshire as their largest holding. “It’s harder to make money the old-fashioned way.”

Berkshire’s rally this year has outpaced the S&P 500’s gains, with the company off to one of its best annual starts in a decade. It’s gained 30% in 2024, while the market benchmark is up 18%. The company isn’t that far behind the so-called Magnificent Seven: a gauge of the biggest tech stocks is up 35% this year.

Buffett has spent the bulk of his life turning Berkshire Hathaway from a struggling textile maker into a sprawling business empire. He shaped the company alongside longtime business partner Charlie Munger, who died in November at age 99.

Berkshire’s market value climbed by roughly 20% a year from 1965 through last year – nearly double the S&P 500’s annual return in that time. That’s turned Buffett into one of the richest people in the world, and perhaps the most prolific investor ever.

The conglomerate’s strength comes as optimism for the economy builds, with the Federal Reserve expected to cut interest rates at its September meeting. Consumer confidence rose to a six-month high in August. Berkshire’s businesses span from truck stop operator Pilot Travel Centers LLC to ice cream chain Dairy Queen and battery brand Duracell.

The stock has added more than $200 billion in market capitalization this year alone – a record for the firm, but a sharp contrast to Nvidia’s nearly $2 trillion increase. Berkshire’s rally has pushed it into overbought territory, based on the relative strength index, and prompted a bit of reticence from analysts.

The fundamental outlook for Berkshire’s core businesses isn’t necessarily that much brighter ahead, according to Bloomberg Intelligence analyst Matthew Palazola, but the firm boasts an “all-weather” portfolio.

Meanwhile, lower interest rates could impact returns on the record cash pile Berkshire amassed while slashing its Apple Inc. stake and paring its Bank of America Corp. holdings. Buffett’s cash heap stood at about $276.9 billion in second-quarter results reported in early August. The sheer size of the Apple stake had become a worry, Check said, and the move to reduce that exposure was prudent. “It’s taken a lot of that risk off the table,” Check said.
 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Chairman Warren Buffett, left, at the Berkshire Hathaway Inc. annual shareholders’ meeting in Omaha, Nebraska, U.S., on May 3, 2024.
| Photo Credit: REUTERS

Billionaire investor Warren Buffett said that the Indian market has “unexplored” opportunities which his conglomerate holding company, Berkshire Hathaway, would like to explore “in the future”.

Mr. Buffett’s remarks came at Berkshire’s annual meeting on May 3 when Rajeev Agarwal of DoorDarshi Advisors, a U.S.-based hedge fund that invests in Indian equities, asked him about the possibility of Berkshire exploring in India, the world’s fifth-largest economy.

“It is a very good question. I am sure there are loads of opportunities in countries like India,” he said.

“The question, however, is whether we have any advantage or insights into those businesses in India or any contacts that will make possible transactions that Berkshire would like to participate in. That is something a more energetic management at Berkshire could pursue,” the co-founder, chairman and CEO of Berkshire Hathaway said.

Mr. Buffett, 93, said Berkshire has a great reputation around the world. He said, his Japanese experience has been fascinating enough.

“There may be an unexplored or an unattended opportunity…but that may be something in the future,” he said about India.

Mr. Buffett said the question is if Berkshire has some kind of advantage in pursuing those unattended opportunities, particularly against people who are managing other people’s money and getting paid based on assets.

During a Question and Answer session, Mr. Buffett answered several questions related to some of the key investment decisions taken by Berkshire Hathway lately.

Decidedly reducing stake in Apple was one of the key topics. Mr. Buffett clarified that it had nothing to do with the long-term view on the stock and Apple will probably remain one of their largest holdings despite the recent slowdown.

He also told shareholders that Vice Chairmen Greg Abel and Ajit Jain have proven themselves the right people to lead Berkshire after he departs.