Berkshire Hathaway Inc.'s market capitalization closed above $1 trillion for the first time on Wednesday, reflecting investor confidence in the conglomerate that Warren Buffett has built over nearly six decades into a name that many consider synonymous with the American economy.
Berkshire joins six U.S. companies in the technology sector or similar with combined assets of more than $1 trillion: Apple, Nvidia, Microsoft, Google parent Alphabet, Amazon and Facebook parent Meta Platforms.
Berkshire's Class A shares rose 0.7 percent to close at $696,502.02. Its more widely held Class B shares rose 0.9 percent to $464.59.
Buffett, who turns 94 on Friday, has run Omaha, Nebraska-based Berkshire Hathaway since 1965.
He transformed a struggling textile company into a conglomerate that includes dozens of old-economy businesses, including Geico auto insurance, BNSF Railroad, Berkshire Hathaway Energy, Brooks running shoes, Dairy Queen ice cream, Gins knives and World Book encyclopedias.
The business unit generated $22.8 billion in profits in the first half of this year, up 26% from 2023.
Berkshire still has a huge stock portfolio, even after selling tens of billions of dollars of shares in Apple and Bank of America Corp., its largest and until recently its second-largest holdings, in 2024.
The sales are the main reason why Berkshire's cash holdings, mostly U.S. Treasury bonds, soared to $276.9 billion as of June 30.
“Buffett built Berkshire in a systematic and relatively low-risk way,” says Steve Cech, president of Cech Capital Management in Costa Mesa, Calif., which has a third of its $2 billion in assets invested in Berkshire stock and options. “It's a big conglomerate, so there's always going to be some things that go right.”
The $1 trillion valuation is based on Berkshire's 553,234 Class A shares and 1,325,192,508 Class B shares outstanding as of July 23.
Berkshire has slowed its share buybacks this year.
When its market capitalization hit $1 trillion, Berkshire shares had risen more than 5.6 million% since the year Buffett took over.
That's about 20% per year, nearly double the annual return of the S&P 500, including dividends.
No single factor seemed to be driving stock prices higher on Wednesday. Berkshire Hathaway's Class A shares are up 28% this year, while the S&P 500, excluding dividends, is up 17%.
Buffett still owns more than 14% of Berkshire Hathaway, despite having donated more than half of his shares to charity since 2006.
Forbes magazine reported Wednesday that he is worth $146 billion, making him the sixth-richest person in the world.
Check said he became a grandfather on Aug. 16 and purchased 100 shares of Berkshire Class B stock for his grandson, Zealand, on that day.
“Investors shouldn't jump in just because the market cap is at $1 trillion. The stock is probably the most fully priced since before the 2008 financial crisis,” he said. “It's a good investment choice for a 10-year horizon.”
