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▲ Berkshire Hathaway (BRK.A·BRK.B), Warren Buffett/AI-generated image
Berkshire Hathaway (BRK.A·BRK.B) has successfully rebounded its stock price in a month, re-emerging as a defensive stock alternative amid the slowdown in the Magnificent Seven's fervor.
According to the investment media outlet Barron's on July 2 (local time), Berkshire Hathaway's stock price showed an upward trend over the past month. Barron's analyzed that the expectation of an increase in second-quarter book value and the shift of funds from high-growth tech stocks to defensive stocks served as the backdrop for the stock rebound. Berkshire's annual earnings flow exceeds $40 billion, and its cash and cash equivalents are estimated to be close to $400 billion.
Berkshire Class A shares rose approximately 8% over the past month, trading at $758,400, and Class B shares also increased by about 8% during the same period, reaching $505.59. However, the year-to-date gains for both stocks remained below 1%. This lagged the S&P 500 Index by about 10 percentage points over the same period, leaving a debate among long-term investors about the sustainability of the rebound.
Barron's estimated that Berkshire's second-quarter shareholders' equity, or book value, increased by about 3% from the first quarter, reaching approximately $522,000 per Class A share. The current stock price is trading at about 1.45 times its book value. This is similar to the average of recent years but falls short of the approximately 1.8 times when Class A shares exceeded $800,000 in May 2025.
A key variable in the stock's underperformance is the succession structure after Warren Buffett. Buffett announced that he would step down as CEO at the end of the year, just before the 2025 annual shareholders' meeting, and currently retains the chairman position. Since then, Berkshire's stock price has lagged the S&P 500 Index by approximately 40 percentage points. Barron's pointed out that the so-called Buffett premium, which was previously attached to the stock price, has disappeared, and investors' wait-and-see sentiment towards the new CEO, Greg Abel, has also played a role.
The improvement in second-quarter book value reflected both operating profit and unrealized gains from its stock portfolio, which exceeds $300 billion. Notably, Apple (AAPL), its largest holding, rose 14% in the second quarter, and other major holdings such as The Coca-Cola Company (KO), American Express (AXP), and Bank of America (BAC) also increased. However, investors are expected to closely monitor the scale of share repurchases in the second-quarter earnings report, which will be released around August 1. Berkshire's share repurchases in the first quarter of this year amounted to only $235 million, whereas it bought back over $25 billion in 2021.
[Article Summary]
-Berkshire Hathaway's stock price rebounded by about 8% over the past month, but its year-to-date gain remained below 1%.
-The second-quarter book value was estimated to have increased by about 3% from the first quarter, reaching approximately $522,000 per Class A share.
-Since Warren Buffett's announcement of stepping down as CEO, Berkshire's stock price has lagged the S&P 500 Index by about 40 percentage points, and the second-quarter earnings report and share repurchase figures, to be announced around August 1, have emerged as the next key variables.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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