Berkshire Hathaway’s Transition Following Buffett’s Resignation

Warren Buffett has announced his resignation as CEO of Berkshire Hathaway, effective at the end of 2025, and will pass the leadership to Greg Abel. Despite stepping down, Buffett will continue in his role as chairman of the board, marking the conclusion of an era known for its remarkable achievements. With these changes, let’s look at three significant stocks Berkshire sold in the last quarter.

Berkshire Hathaway became a net seller in the fourth quarter, focusing on the following companies:

• Amazon – The company divested 7.7 million shares, decreasing its total holdings by a substantial 77%. This move leaves technology stocks comprising only 0.1% of Berkshire’s portfolio.
• Apple – Buffett’s firm reduced its stake here too, selling 10.3 million shares, representing a 4.3% decline in total holdings. Apple remains the company’s largest investment by weight, holding 19.5% of the overall stock portfolio.
• Bank of America – Berkshire shed approximately 50.8 million shares of Bank of America stock, which reduced its holdings by 8.9%. It is noteworthy that this stock is still the fourth largest in their portfolio, making up 8.2% of total investments.

Overall, Berkshire Hathaway’s stock performance has shown a trend of decreased exposure to both tech and banking sectors. The notable sales of both Apple and Bank of America contributed to a larger cash reserve for the firm.

In a more positive turn, Berkshire has made a foray into investing in the New York Times and augmented its position in another high-dividend stock as Buffett prepares to step aside. The conglomerate has acquired over 8 million additional shares of energy giant Chevron, boosting their total by 6.6% in the last quarter.

Chevron now ranks as the fifth-largest holding in Berkshire’s portfolio, constituting about 7.6% of its total public holdings. The stock presently boasts a forward yield of 3.9%.

There’s a lot of talk about artificial intelligence and its implications, particularly regarding valuation risks and possible disruptions in various sectors. Volatility in tech stocks has been noticeable, but the energy sector appears to be more resilient. Not only does it have interesting dynamics, but it also stands to benefit as data centers demand considerable power.

Chevron’s stock has risen 18% over the past year, with total returns adjusted for dividends hovering around 22%. It wouldn’t be shocking to see Chevron climb to become the fourth largest investment for Berkshire this year as it divests more from Bank of America while bolstering its energy investments.

When considering an investment in Chevron, it’s worth evaluating the overall landscape. Buffett’s strategies are often closely watched, and while Chevron wasn’t highlighted in some analyst recommendations, it still showcases potential for growth, especially in today’s fluctuating market.