Berkshire's $381B Cash Pile vs. Silent Buybacks as Leadership Transition Unfolds

Berkshire Hathaway Inc. (BRK.A, BRK.B) reported a 34% year-over-year increase in third-quarter operating earnings, driven by a record $381.67 billion cash pile and robust performance in its insurance underwriting segment, according to a Nasdaq report. The conglomerate's operating income rose to $13.485 billion, with insurance underwriting profits surging over 200% to $2.37 billion, Seeking Alpha reported. Despite these gains, the company maintained its policy of no share buybacks in 2025, a decision that has sparked investor concerns about capital deployment and leadership transition.

The cash reserve expansion, the largest in Berkshire's history, reflects a combination of strong operating results, no stock repurchases, and strategic asset sales. Total net earnings attributable to shareholders climbed to $30.796 billion, up 17% from the prior year, according to a Cryptopolitan report. However, the absence of buybacks—Berkshire did not repurchase a single share in the first nine months of 2025—has drawn scrutiny. With its stock down 11.5% since Warren Buffett announced his CEO transition in May, Benzinga noted, analysts have downgraded the stock, citing leadership risks and declining reinsurance margins, according to Seeking Alpha.

Warren Buffett, 95, is set to step down as CEO by year-end, with Greg Abel assuming the role. The transition has already impacted investor sentiment, with Berkshire's shares underperforming the S&P 500 by 10.9 percentage points as of late October, according to Benzinga. Abel, who will also pen the annual shareholder letter starting in 2026, faces the challenge of maintaining Buffett's legacy while navigating a shifting economic landscape. Analysts at Keefe, Bruyette & Woods cut their price target for Class A shares to $700,000 from $740,000, labeling the stock "underperform," a move reported by Seeking Alpha.

Berkshire's reluctance to deploy its vast cash reserves has intensified debates about its investment strategy. While the company generated $13.5 billion in operating income, it remained a net seller of equities for the 12th consecutive quarter, locking in $10.4 billion in taxable gains, as noted by MarketWatch. Some observers, like Edward Jones analyst James Shanahan, argue that Abel could restore confidence through increased investment activity or buybacks, a point highlighted in the Financial Express earlier coverage. Others, including longtime Berkshire investor Tom Russo, emphasize the company's long-term resilience, noting its diversified portfolio of 200 businesses, from railroads to consumer brands, as reported by The Globe and Mail.

A notable exception to the cash hoarding trend was Berkshire's $9.7 billion acquisition of Occidental Petroleum's OxyChem unit in October—the conglomerate's largest deal since 2022, according to Bloomberg Law. The purchase signals a cautious optimism about deploying capital, though it remains a fraction of Berkshire's overall liquidity. Meanwhile, Buffett's refusal to chase market rallies has led to questions about his assessment of current valuations. "Warren saw no value out there," one analyst noted, highlighting the contrast between Berkshire's cash pile and the S&P 500's 16.3% year-to-date gain.

As the leadership transition nears, investors will closely watch how Abel balances Berkshire's conservative ethos with the need for strategic growth. For now, the company's record cash reserves and operating performance underscore its financial strength—even as the market grapples with uncertainty about its future direction.