Berkshire Hathaway Hits Record Highs as Q4 Rally Outpaces S&P 500

Key points

• Berkshire Class A and B shares both gained 19.1% since October 1, closing at record highs 11 and 10 times, respectively.
• The company repurchased $9.6 billion of its own stock in Q3, double the amount bought in the first half of the year.
• Q3 operating profits fell 5.8% to $12.7 billion, driven by a 43% drop in insurance underwriting income, particularly at GEICO.
• Berkshire likely sold 30 to 40 million Bank of America shares in Q3, continuing a nine-quarter reduction trend.
• The company issued $1.1 billion in yen-denominated bonds to hedge currency risks on its Japanese stock investments.

Background

Berkshire Hathaway shares had previously reached record highs in October 2026, erasing losses from the 2025 CEO transition. The rally reflected a market rotation away from volatile AI and tech stocks toward Berkshire’s defensive profile, characterized by massive cash reserves and diversified earnings. In late October, the stock benefited from higher interest rates boosting its cash pile and gains in traditional value holdings.

How outlets are covering it

CNBC emphasizes the stock’s outperformance relative to the S&P 500 and the continued reduction of the Bank of America stake. Yahoo Finance highlights CEO Greg Abel’s bullish stance, evidenced by record buybacks, and notes the stock’s appeal as a hedge against AI volatility. Seeking Alpha offers a contrarian view, arguing the stock is overvalued at over $850,000 per Class A share, with a fair value estimated at $790,945, despite remaining long-term constructive due to compounding durability.

Why it matters

Berkshire’s rally signals investor preference for defensive, diversified portfolios amid AI sector volatility. Record buybacks and continued Bank of America sales indicate management’s confidence in the stock’s valuation and portfolio optimization. The yen bond issuance reflects strategic currency hedging for international investments.

What to watch

Berkshire will file its Q3 13F with the SEC on Monday, revealing its latest equity portfolio holdings. Investors will watch for further Bank of America sales and potential Alphabet purchases. The company’s future buyback pace will depend on whether management views the stock as undervalued at its current 1.6 times book value.