Berkshire Hathaway shares rose Monday after the company reported strong quarterly earnings and announced a large share buyback program.
The surge marks a critical test for CEO Greg Abel as he implements a new cash-deployment strategy following the tenure of Warren Buffett.
Shares climbed to their highest level since May 2025 [2], the period when Buffett announced his departure from the company. The rally followed a quarterly earnings report that beat analyst expectations and a decision to resume sizable stock buybacks.
Under Abel's leadership, the conglomerate has shifted its approach to capital. The company deployed $26 billion in cash during the first half of 2026 [3]. This aggressive use of capital is intended to return value to shareholders, while the firm navigates a changing economic landscape.
Despite the market's positive reaction, not all investors are convinced by the current trajectory. Michael Burry, the investor known for his role in the 2008 financial crisis, said he is not buying the stock [1].
Burry's caution stems from a skepticism regarding the company's new strategy for deploying its massive cash reserves [3]. While the buyback program has boosted short-term share prices, some analysts suggest the move may signal a lack of attractive external acquisition targets.
The current rally underscores a growing investor confidence in Abel's ability to maintain the company's stability. However, the divergence between the stock's performance and the caution expressed by Burry highlights a broader debate over whether Berkshire can maintain its growth without Buffett's specific investment philosophy.
“Shares climbed to their highest level since May 2025”
The rally indicates that the market is currently rewarding Greg Abel's preference for share buybacks over large-scale acquisitions. By returning capital to shareholders, Berkshire is supporting its own stock price in the absence of the 'Buffett premium.' However, the skepticism from figures like Michael Burry suggests a lingering concern that the company may be struggling to find the high-value, undervalued assets that defined its historical success.
