Berkshire shares surge as Wall Street swoons amid AI fears

Skip Navigation Markets Business Investing Tech Politics & Policy Video Watchlist Investing Club PRO Livestream Menu In this article BRK.B BRK.B Follow your favorite stocks CREATE FREE ACCOUNT (This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.) Berkshire shares surge as Wall Street swoons amid AI fears Berkshire Hathaway shares roared past the S&P 500 index this week as investors moved money away from slumping tech stocks and moved into what appears to be the relative safety of a traditional conglomerate with relatively little exposure to artificial intelligence amid fears massive spending on data centers won't pay off . One month ago, Berkshire's widely held B shares were underperforming the S&P by 13.6 percentage points for the year. With help from three more record-high closes this week, Berkshire is now 5.8 percentage points ahead of the benchmark. Berkshire more than doubled its share repurchases last quarter to $9.6 billion, while operating earnings declined slightly, the company said on Saturday . Zoom In Icon Arrows pointing outwards Berkshire was up more than 5% this week while the S&P fell almost 2.7%. Zoom In Icon Arrows pointing outwards The contrast is even sharper with the Nasdaq Composite , which fell 3.4% on the week. Thursday's especially heavy tech selling pushed the index down more than 10% below its most recent high in what is commonly referred to as a " correction ," but it did make up some of its lost ground Friday . Zoom In Icon Arrows pointing outwards Two weeks ago, Berkshire's share prices completely erased all of the roughly 15% drop they suffered in the three months following Warren Buffett's surprise announcement at the 2025 shareholders meeting that he would step down as CEO at the end of that year. Now they are up 6% from the record high closes they hit the Friday before Buffett's revelation on May 3, 2025. Zoom In Icon Arrows pointing outwards Alphabet's slide cited as example of 'disappointing' stock picks Berkshire is not completely removed from the convulsions around AI. Abel told us in early September he sees a " significant opportunity " ahead for Berkshire Hathaway Energy to provide electricity to data centers. He also expected Berkshire would benefit from its big bet on Google parent Alphabet , saying he and Warren Buffett knew AI was "going to have a significant impact on America and businesses," and " we saw Google as a significant player . " Now that investment is getting negative reviews this week as the stock slumps along with other companies related to AI. As of the end of June, Berkshire reported it owned almost 106 million shares of Alphabet, including 28.6 million shares it bought directly from the company in June: $5 billion of its Class A shares (GOOGL) for $351.81 each and another $5 billion of Class C shares (GOOG) for $348.20 each. They are around $284 per share now. It bought another $7 billion of Alphabet shares on the open market during the second quarter, adding to the position it started building in last year's third quarter, an investment initiated by Warren Buffett . Zoom In Icon Arrows pointing outwards Bloomberg suggests that "with cracks in the AI trade starting to show, Berkshire's sudden push [into AI] may appear ill-timed." On June 30, the position had a market value of $37.8 billion and it was the third largest equity holding in Berkshire's portfolio. Since then both the Class A and Class C shares have dropped by around 20% and the stake is now valued at $30.2 billion , falling behind Coca-Cola's $38.3 billion to the portfolio's #4 position. (In just over a week, we'll find out whether Berkshire made any changes to its Alphabet position during the third quarter ending September 30.) Zoom In Icon Arrows pointing outwards Bloomberg quotes CFRA Research analyst Cathy Seifert as saying, "I do think that part of this may be a conscious decision to increase their exposure. One has to ask the question though, is it a little late?" But the article notes that "for dedicated value investors and longtime Berkshire observers, such jitters may not really matter," with Keefe Bruyette & Woods analyst Meyer Shields saying Abel probably sees bets on AI as a long-term wager on the technology's potential, in keeping with the "conservatism that you would expect at Berkshire Hathaway." A drone view shows a data center at the Google Storey County Campus in the Tahoe-Reno Industrial Center in Sparks, Nevada, Oct. 9, 2026. Hyperscaler spending on AI data centers has fueled a rise in tech sector bond issuance. Daniel Cole | Reuters At Barron's , however, Andrew Bary sees what he estimates is a $3 billion loss on Alphabet as part of a "disappointing" long-term trend in Berkshire's stock choices "The company hasn't created much value from stock picking during the current decade" even though the "S&P 500 has returned 150% since the end of 2019 and tech stocks have quadrupled." While Berkshire's investments in five Japanese "trading houses ," Chevron , and Chubb have done well, "there have been plenty of losers or simply mediocre investments that have been closed out." He cites Verizon , HP , Paramount (now Skydance) , General Motors , Constellation Brands , and Pool . While he estimates Berkshire's Occidental Petroleum investment is up about 20% from what it paid, OXY is "far behind most energy stocks" amid this year's big increase in crude prices. Bary also lists stocks that have continued to rise in price after Berkshire cut its stakes, with Apple being the worst offender. That stake has been reduced by 75% since 2023 at what Bary calculates is an average selling price around $200 per share, well below AAPL's current $342. Despite those sales, Apple is Berkshire's largest equity holding with a market value of $78 billion . The stock is up 1200% since Berkshire started buying it at the beginning of 2016, at a time when many thought the company had already seen its best days. Zoom In Icon Arrows pointing outwards Bary thinks Abel will probably keep Berkshire's core equity investments but may concentrate more on his strengths going forward: improving Berkshire's operating companies and making new acquisitions. His conclusion: "Barring a market rout, equity investing may not be central to Berkshire anymore. "And if any new Berkshire holdings are revealed soon, it may not be a good idea to buy them. The record hasn't been great." Small buy helps lift Sirius XM shares Berkshire Hathaway's disclosure that it had made a relatively small $27 million addition to its $4.1 billion Sirius XM position helped fuel an ongoing rally that lifted the satellite radio company's shares to a 52-week high this week. On Thursday morning last week, Sirius XM reported a 14% increase in its Q3 free cash flow, 5,000 more self-pay subscribers, and it raised its 2026 full-year financial guidance. The stock ended 4.9% higher that day at $28.67. On Friday, Monday, and Tuesday, Berkshire bought more than 924 thousand shares at an average price of $29.10 as the stock continued to gain ground, ending Tuesday at $30.80. Berkshire disclosed the buys late Tuesday evening, apparently helping to fuel an additional 8.4% gain as the stock closed at $33.40 on Wednesday. It hit a 52-week intraday high of $33.76 on Thursday but finished lower Friday at $32.40. Zoom In Icon Arrows pointing outwards Overall, Sirius XM is up 18.6% since the earnings release and has gained 62.0% so far this year. It's the first addition to Berkshire's stake since late-July and early-August last year. In 2025, it bought a total of 7.3 million shares at an average price of $21.86. The position is likely one of portfolio manager Ted Weschler's stocks. Berkshire utility asks for 57% rate