Why It Matters
Berkshire Hathaway’s second-quarter earnings surge and shift toward equity purchases signal a major strategic turn under newly installed CEO Greg Abel. After Warren Buffett’s company spent over three years pulling cash out of stocks, the $365.5 billion cash position is now being deployed — a move that carries implications for market dynamics and signals confidence in valuations after years of skepticism.
What Happened
Berkshire Hathaway’s operating earnings rose 16% in the second quarter of 2026, reaching $12.98 billion compared with $11.16 billion in the same period last year. The results mark the second full quarter under CEO Greg Abel, 64, who took over at the beginning of the year as Warren Buffett, now 95, transitioned to the chairman role.
Abel has begun deploying Berkshire’s legendary cash hoard through aggressive share buybacks and equity purchases. The company repurchased approximately $4.5 billion of its own stock in Q2, sharply higher than the $235 million in buybacks during Q1. More significantly, Berkshire became a net buyer of equities to the tune of roughly $20 billion during the quarter — a historic pivot after the company had been a net seller of stocks for 14 consecutive quarters.
The equity purchases included a $10 billion investment in Alphabet, which Buffett initiated after consulting with Abel. That stake elevated Alphabet into Berkshire’s five largest equity holdings by market value as of the end of June.
Performance varied across Berkshire’s operating divisions. Manufacturing, service, and retailing earnings jumped 24% to $4.47 billion. Berkshire Hathaway Energy profit surged 27% to $891 million. The BNSF railroad posted a 6% increase in earnings to $1.56 billion. Insurance underwriting earnings, however, fell 13% to $1.73 billion, and insurance investment income declined 9% to $3.06 billion. The company also completed its acquisition of Taylor Morrison during the quarter.
By the Numbers
16% — operating earnings growth year over year
$12.98 billion — Q2 operating earnings
24% — manufacturing, service, and retailing earnings increase
27% — Berkshire Hathaway Energy profit increase
$4.5 billion — share repurchases in Q2
~$20 billion — net equity purchases in Q2
$365.5 billion — cash on hand at end of June
14 — consecutive quarters as a net seller of stocks prior to Q2
$10 billion — Alphabet investment
Zoom Out
Berkshire’s pivot from buyer to seller carries symbolic weight in markets accustomed to reading Buffett’s moves as a barometer of confidence. For more than three years, the company had been liquidating equities faster than it deployed capital — a posture often interpreted as skepticism toward market valuations. The reversal suggests the new leadership sees opportunity even as the broader market context remains mixed. Year to date, Berkshire shares are up 3%, significantly trailing the S&P 500’s 13% gain, though shares have advanced 9% over the past three months.
The scale of equity purchases also reflects the sheer magnitude of dry powder Berkshire has accumulated. With cash declining from $397.4 billion three months earlier to $365.5 billion at the end of June, the company is beginning to put idle capital to work at a pace that could sustain significant deployment over time.
What’s Next
Investors will watch whether Abel continues deploying capital at this pace in coming quarters and whether Berkshire identifies additional large acquisitions or equity stakes. The combination of strong operating earnings, renewed equity buying, and leadership continuity under Abel sets the stage for a potentially more aggressive capital allocation posture than the preceding years under Buffett’s sole stewardship.