Berkshire Nears a Record as Greg Abel Starts Deploying Cash

Berkshire Hathaway's Class B shares closed at $532.02 on October 16, only 1.4% below their record, after recovering from the selloff that followed Warren Buffett's succession announcement. The rally suggests investors are beginning to judge Greg Abel on capital allocation rather than simply subtracting a Buffett premium.

The stock has repaired most of the succession gap

Buffett said at the May 2025 annual meeting that he planned to step down as chief executive at year-end. Berkshire shares then fell more than 14% over the following three months. The Class A shares ended October 16 at $798,000, while the Class B shares finished at $532.02.

The recovery has not matched the broader market for the full year, but the gap has narrowed. CNBC calculated that Class B shares trailed the S&P 500 by six percentage points, down from a 17.5-point deficit on June 1.

Capital deployment is changing the debate

Berkshire repurchased $4.5 billion of its own stock in the second quarter and made new equity investments, including Alphabet and homebuilders. The company's official second-quarter filing showed Greg Abel certifying the report as chief executive, marking the governance transition that investors had spent years anticipating.

The group still held roughly $360 billion of cash after adjusting for rail cash and Treasury-bill payables in CNBC's calculation. Higher short-term rates increase income on that balance, but cash also creates an opportunity cost if attractive acquisitions or securities are unavailable.

Berkshire's mix has helped during the technology selloff. Insurance benefits from a quiet hurricane season, Chevron gains from higher oil prices, and Coca-Cola reached a record in the source period. Those are useful offsets, but they do not eliminate exposure to underwriting losses, commodity prices or a reversal in defensive stocks.

What would confirm the re-rating

A higher share price alone cannot prove that the market has accepted the succession. The evidence will come from Abel's decisions: the price paid for acquisitions, the discipline of repurchases, operating performance at the subsidiaries and whether cash per share keeps rising without productive deployment.

The near-record valuation gives management less room for a buyback to be obviously accretive. At the same time, Berkshire's scale makes even a multibillion-dollar investment modest relative to the balance sheet. The transition is off to a constructive start, but the durable test is whether Abel can convert patience and liquidity into per-share value.