Berkshire Hathaway: here's what the market thinks for the post-Buffet era

On the one hand, Warren Buffet who, with the same last quarterly report, confirmed the handover of the baton to Greg Abel - as CEO - at the beginning of 2026. On the other, the dynamics of the recently published company accounts and future prospects. This is one of the ways one can attempt to approach the complex world of Berkshire Hathaway .

The Oracle of Omaha - as has been known since the shareholders' meeting last May - has decided to hand over his hand. Of course! It is likely that the 95-year-old financial guru will continue to have some influence in the holding company's decisions. He himself has indicated that he will retain 'a significant amount of class A shares' until the shareholders feel comfortable with his successor. Having said that, however, from next year it will be Abel who will lead the group, chair the annual shareholders meeting and sign the 'mythical' Letter to Shareholders. A fact which - playfully - on the one hand marks a break with the past; and which, on the other hand, has had its impact on the stock market. According to the Bloomberg terminal, both the A shares (individually worth more than $750,000) and the B shares (accessible to retail) started a downward trend right around the time of the last shareholders' meeting. This is a dynamic on which - according to the experts - several aspects have weighed. In this sense, KBW pointed out how the fall in interest rates has affected investment returns on Float fixed income securities (i.e. insurance business premiums not absorbed by claims). Or, how the trade war between the US and China has certainly not been a viaticum for rail business. Nevertheless, it is undeniable that Berkshire Hathaway has always benefited from the so-called 'Buffet premium'. It is no mystery that the investment thesis of so many operators - especially retail - was exclusively the enormous trust in the Oracle of Omaha. It all begins and ends there. Now, with the change of hands, the motivation has been lost and the stock would have lost its appeal.

True! The start of the downward trend in 2025 (which later turned into a sideways dynamic) was preceded by the jump in the price-to-book-value ratio to 1.7 times. Put differently: the B share had become so expensive - the historical average for the decade is 1.3 times - that the retracement may have been a natural occurrence. More. The enormous accumulated liquidity - $358 billion as at 30/9/2025 - would, according to some traders, be an indication not of a correct pause in investment strategy, but of an inability to grasp new trends. One among them: that of artificial intelligence. As a result, the shares - together with the market's reduced interest in a value stock such as Berkshire Hathaway - would have been sold regardless of the approaching change of the 'guard'. Having said that, however, the very fact that Buffett continues to assure on Abel's qualities and his presence is proof that in any case the passing of the baton constitutes a delicate moment. A transition in respect of which the do-it-yourselfer must be careful and which - evidently - only time and, above all, the conglomerate's economic results will gradually be able to push into the background. Already the economic results. What, then, are the company's accounting dynamics? To answer this question, it is first necessary to recall - in principle - the articulation of the group's business. On closer inspection, the holding company divides its business into five major areas. The first is the insurance world where - apart from the different companies - a distinction is made between Underwriting and Float investment. The second is railways. This includes BNSF Railway, which is among the leading rail companies in North America. The third front, then, is the Energy segment. Several businesses belong to it: from electric utilities to gas pipelines to renewables. The fourth area (Manufacturing, Service and Retailing) is, for its part, representative of industrial and commercial companies. Finally, the fifth segment: Investing. This - representing the result of 'big' investments in the stock market (from American Express to Apple to BofA, Coca Cola and Chevron to name the most relevant) - is not an operational area. But, clearly, it has a major impact on the accounts.

Well: in the third quarter of 2025, Berkshire Hathaway's net profit was $30.86 billion, up 16.4% compared to the same period in 2024. Nine-month profitability, on the other hand, declined. Here the profit was 47.9 billion, compared to 69.9 billion a year earlier. Why such a trend? The answer is articulated. With reference to the last quarter, a central role was played by the insurance segment. The latter posted a shareholder attributable profit in Underwriting (premium income minus claims and claims expenses) of EUR 2.37 billion, compared to EUR 0.75 billion twelve months earlier. This increase is due to the near absence of catastrophic events and the recovery on claims from previous years. The comparison is facilitated by extraordinary provisions recorded in 2024 for a bankruptcy-related lawsuit. On the other hand, profitability from investments declined due to falling interest rates. With regard to the Energy business - together with the profitability of the railway segment remaining more or less stable - profitability, on the other hand, slowed down in the wake of lower earnings in the US utilitities and gas transport. On the contrary, the Industrial, Retail and Services area did well. This was characterised by an increase in profit (+8%) thanks to the recovery in demand in the industry and - above all - to cost efficiencies. Finally: Investing. Here it is worth noting the increase in profitability, accounting only, in the wake of the market rally. In short: in the last quarter, the group benefited from insurance growth in technical management and the good performance of the industrial segment. Looking, however, at the final figures for the first nine months? Here one realises that the slowdown in profitability can be attributed to the world of stock market investments. Investing, between the beginning of January and the end of September 2025, posted a profit attributable to shareholders of 17.2 billion. In the same period last year, by contrast, earnings were 36.39 billion. It is clear how, in the face of such a jolt, profitability fell. On the other hand, when only operating activities are taken into account, profit attributable to shareholders returns - for the first nine months of 2025 - up from last year.

In such an environment, Berkshire Hathaway's operating business appears solid. So much so that analysts - over and above doubts about the fall in rates impacting fixed income and the possibility that the insurance cycle (also in the wake of tariffs that are squeezing company margins in the auto sector) may have peaked - are asking one question above all: will the monstrous liquidity be used in the right way? The company gave an initial answer with the move on Occidental Petroleum. The petrochemical group was acquired for the sum of 9.7 billion. Not only that: the company revealed a new 4.3 billion stake in Alphabet. Having said that, Buffet has always emphasised: 'We'd love to spend (the cash), but we won't do it unless we're convinced that we're doing something with very little risk and can make us a lot of money (...) the opportunities are not attractive'. So,' recalls Charlie Bilello, 'you can look at Apple's holding, which has been gradually declining to its current 238.2 million shares. When the holding company started, in 2016, to buy the bitten apple group, the stock was trading at around 10 times earnings and 2 times turnover. 'Today, Apple,' says the expert, 'is trading at more than 36 times profits and almost 10 times sales. In other words: Buffett and his team see very high prices compared to earnings, and therefore less room to make 'low-risk, high-return' investments. Hence the caution in using cash'. That prudence that characterises the same stock exchange which, precisely, is in a sort of standby with regard to the holding company. A wait that - evidently - could be resolved - one way or another - in the wake of the new CEO's future moves. In the meantime, according to Seeking Alpha, the price-to-book value is currently 1.5 times (over the past 12 months). This is still higher than the median value of the comparison sector. Profitability, for its part, is described as 'positive' with a Return on Total Assets of 5.5%. That is to say: a higher percentage than that of the comparison sector.