Berkshire Hathaway Trims Bank of America Stake by 17% in Q2 2025

Berkshire Hathaway, led by Warren Buffett, has continued to reduce its holdings in Bank of America (BAC.US) during the second quarter of 2025. The latest quarterly report from Berkshire Hathaway indicates that the company has continued to trim its stake in the banking sector, with Bank of America being a notable target. As of June 30, 2025, Bank of America remains one of the significant holdings for Berkshire Hathaway, but the recent reduction suggests a strategic shift in the investment portfolio.

The decision to reduce holdings in Bank of America aligns with Buffett's long-standing approach to portfolio management, which often involves rebalancing investments to optimize returns and manage risk. This move comes at a time when the banking sector is facing various challenges, including regulatory pressures and economic uncertainties. By trimming its stake in Bank of America, Berkshire Hathaway may be positioning itself to capitalize on other investment opportunities that offer better growth prospects or lower risk.

The reduction in Bank of America holdings is part of a broader trend observed in Berkshire Hathaway's investment strategy. The company has been known to periodically adjust its portfolio to reflect changing market conditions and investment opportunities. This approach allows Berkshire Hathaway to maintain a diversified portfolio while focusing on high-quality investments that align with its long-term goals.

During the three-month period, Berkshire Hathaway sold approximately 69 billion dollars worth of stock, realizing 53 billion dollars in pre-tax profits, while also purchasing around 40 billion dollars worth of stock. Although the 13F filing did not disclose the specific details of individual stock transactions, if Berkshire Hathaway had reduced its holdings of approximately 6.31 billion shares of Bank of America (with a current market value of around 265 billion dollars), it would align with the reported data.

According to calculations, Berkshire Hathaway's cost basis for these shares is approximately 7 dollars per share, primarily due to the acquisition of over 10 billion shares through warrants exercised at a strike price of 7 dollars a decade ago. Data indicates that the average price of Bank of America stock during the second quarter was 42 dollars, implying that Berkshire Hathaway's holding cost is only about 17% of the current market price, consistent with the reported profit margin.

Throughout the year, Bank of America's stock performance has lagged behind the broader market by nearly two percentage points, making it the worst performer among large banks. The recent financial report from Berkshire Hathaway, released last Saturday, disappointed investors, leading to a 2.9% drop in its stock price on the following Monday.

The decision to reduce holdings in Bank of America also highlights the importance of strategic planning in investment management. By carefully analyzing market trends and economic indicators, Berkshire Hathaway can make informed decisions that maximize returns and minimize risks. This proactive approach to portfolio management has been a key factor in the company's success over the years.