Berkshire Hathaway has resumed share repurchases after more than a year of inactivity, under the leadership of new CEO Greg Abel, who took office earlier this year. He decided to buy back shares again because he believes the intrinsic value of Berkshire Hathaway's stock now exceeds its market price.
Abel succeeded Warren Buffett earlier this year, following Buffett's more than six decades of leadership since taking control of the company in 1965. Abel began his career as an accountant before rising to a key role in Berkshire's energy business, and he is now beginning to build his own legacy.
Berkshire Hathaway invested $4.5 billion in share buybacks, making it a net buyer in the second quarter after 14 consecutive quarters of net stock sales. Simultaneously, the company deployed substantial cash reserves to increase investments, purchasing over $23 billion in publicly traded company shares.
Alphabet is among these investments, with Berkshire acquiring shares valued at $10 billion. This marks a departure from Warren Buffett's traditional investment approach, as Abel seeks to make his own mark by actively utilizing the company's massive cash reserves, which still amount to approximately $365 billion.
Over the past three years under Warren Buffett's leadership, he chose to slow investments and gradually reduce the portfolio of publicly traded stocks, adhering to his long-standing Value Investing principles and viewing current market stock prices as overvalued.
Thus, Greg Abel's decision to invest again stands out significantly, especially given that the U.S. stock market is near all-time highs.
However, in the same quarter, reports indicated that Berkshire sold about $3.7 billion in shares, representing the lowest level of stock sales since 2022.
Greg Abel has received continuous acclaim from investors and shareholders for his management approach shortly after taking the helm.
According to the second quarter 2026 earnings report, which marked Abel's second quarter in charge, operating income rose 16% year-over-year, supported by strong performance in energy, rail, and manufacturing businesses, which offset weaker results in insurance.
Operating income increased to $12.98 billion from $11.16 billion the previous year. Manufacturing, service, and retail businesses saw profits rise 24% to $4.47 billion. Berkshire Hathaway Energy’s profits surged 27% to $891 million, while BNSF Railway's profits increased 6% to $1.56 billion.
The insurance business continued to drag on earnings but remained profitable. Underwriting earnings declined 13% to $1.73 billion from $1.99 billion the year before, while insurance investment income dropped 9% to $3.06 billion.
Net income more than doubled year-over-year to $25.7 billion, largely driven by increased market value of Berkshire's equity portfolio.
Berkshire’s results reflect the ongoing strength of the U.S. economy, with many industries performing well despite consumer pressures from high oil prices and inflation.
However, since the beginning of the year, Berkshire’s shares have risen by only about 3%, compared to the S&P 500’s total return of approximately 14% over the same period.
This presents a key challenge for Abel: in addition to preserving Warren Buffett's culture and investment philosophy, he must determine whether he can deploy Berkshire’s vast cash holdings to generate returns that outperform the market.
After Buffett chose to hold cash and wait for opportunities for many years, Abel is now clearly signaling that Berkshire is ready to reengage actively in investing.
Source:Berkshire Hathaway,Financial Times, CNBC [1][2],Bloomberg
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