Berkshire Stock (BRK.B) Enters the Greg Abel Era. I’m Bullish

Berkshire Hathaway (BRK.A) (BRK.B) is entering a new chapter as Greg Abel officially takes over leadership while Warren Buffett moves into a chairman-only role. So far, the market has reacted with a collective shrug, with the stock largely idling in neutral over the past year. Yet beneath that calm surface lies one of the largest cash piles in corporate America, which could become far more active under Abel’s leadership. For that reason, I believe sentiment could shift as capital deployment accelerates, which is why I remain bullish on Berkshire stock.

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Why the Laggard Label Sticks

I’ve heard many investors are growing frustrated with Berkshire’s lackluster share-price performance, and it’s easy to understand why. Many view it as the kind of stock that should hold up well in periods of extreme volatility like this one. However, combined with the company’s broader inactivity and lack of meaningful dealmaking, the investment case has come to seem increasingly dull.

The latest earnings report didn’t exactly wake up the bulls either. Operating profits for Q4 tumbled by about 30%, with much of that bruising coming from the insurance segment. This was driven by cooling interest rates, which began nibbling away at the income generated by a massive $176 billion “float,” while Government Employees Insurance Company (GEICO) found itself in a high-stakes battle for customer retention, with its underwriting profits cut in half.

However, the story wasn’t one of universal decline. The conglomerate’s “boring” private pillars, BNSF Railway and its energy utilities, actually acted as the portfolio’s stabilizers. Despite a softer industrial backdrop and rising labor costs, BNSF managed to grow its Q4 profits by 5.5%, providing a necessary cushion that prevented an even deeper slide for the Berkshire empire.

Meanwhile, the bears have found plenty of ammunition in Berkshire’s mountainous cash pile, which hit a staggering $373.3 billion by the end of 2025. Sure, the cash pile offers a massive margin of safety. At the same time, though, it’s a massive opportunity cost. With interest rates on a steady downward trajectory, holding that much dry powder in Treasuries feels like leaving money on the table. Skeptics argue that if even the “Oracle of Omaha” couldn’t find a place to deploy that capital, perhaps the market has simply outgrown Berkshire’s traditional playbook.

A New Era of Berkshire Opportunism

For the first time in nearly two years, the buyback machine has been switched back on. Just last week, Berkshire quietly disclosed that it had resumed repurchasing its own shares, a signal that Greg Abel, with Buffett’s explicit blessing, as he mentioned on CNBC, has finally found a price he likes. It’s a classic “put up or shut up” moment for the new CEO, who also put $15 million of his own salary into Class A shares to show he’s eating his own cooking.

However, the more interesting move in Berkshire’s latest set of news, in my view, was probably the $9.7 billion cash acquisition of OxyChem from Occidental Petroleum OXY -0.91% ▼ . The deal closed in early January and was Greg Abel’s coming-out party as Berkshire’s capital allocator. They just snapped up a top-tier industrial chemicals business at what appears to be a cyclical trough. Abel proved that Berkshire remains the only predator in the jungle with a stomach big enough to swallow a $10 billion asset in a single bite.

Considering the resumption of buybacks and the OxyChem move, I believe Berkshire might be turning a page here. As the broader market grows choppy and valuations elsewhere remain frothy, this $373 billion war chest could be transitioning from a “cash drag” to a superweapon. We are entering a period where Berkshire could become notably more active, leveraging its liquidity to snatch up assets from over-leveraged competitors who are starting to feel the pinch of a cooling economy.

Deciphering the Buyback: Berkshire’s Hidden Book Value

When we talk about Berkshire’s valuation, it’s all about its Price-to-Book (P/B) ratio. Right now, the stock is trading at 1.5x P/B, which sits right in the middle of its historical range over the last decade. On paper, it looks fairly valued. But here’s where it gets interesting: the resumption of buybacks suggests the folks inside the building believe the stock is significantly undervalued.

Why? It comes down to what you call an Adjusted P/B. Remember, Berkshire carries its massive private subsidiaries, companies like Precision Castparts, Marmon, and now OxyChem, on the balance sheet at their historical cost minus depreciation. This accounting doesn’t reflect their true, multi-billion-dollar earning power in today’s dollars. If you were to mark these private “hidden gems” to their actual market value, Berkshire’s book value would balloon, making today’s P/B way more compressed. The very fact that Berkshire is repurchasing shares today only confirms that the real value of its assets is much higher.

Of course, risks remain, as a lengthier-than-expected recession could easily hammer the railroad and retail segments. But the way I see it, the combination of a record cash fortress and a CEO who is finally pulling the trigger is a bullish setup you simply can’t ignore, especially after a notable period of underperformance.

Is Berkshire Hathaway Stock a Buy, Sell, or Hold?

On Wall Street, Berkshire stock has a Moderate Buy consensus rating, based on a single bullish analyst rating. Despite the lack of a meaningful sample size, Berkshire’s average price target of $578 implies about 17.9% upside potential over the next 12 months.

The Bottom Line

Berkshire Hathaway is currently a coiled spring. The market has lately focused exclusively on AI headlines and macro developments, forgetting this slow-moving giant. In the meantime, however, Greg Abel is quietly deploying an enormous cash pile into higher-yield, tangible assets. With the stock trading at a historically reasonable multiple and the real value of Berkshire likely way above its GAAP metrics, the margin of safety is wide, and the upside is likely just beginning to manifest.

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