Berkshire shares trade lower this week even as Greg Abel’s first annual meeting as chief executive drew positive reviews from the investment community. The operating print for the first quarter jumped 18 per cent year-on-year to roughly $11.6 billion, driven by a 28.5 per cent surge in insurance underwriting income to $1.7 billion. The conglomerate is sitting on a cash pile approaching $400 billion. Abel fielded questions for six hours on Saturday at the CHI Health Center in Omaha. Berkshire Hathaway held its first annual meeting without Warren Buffett as chairman.
Analysts noted the shift in tone. UBS wrote that Abel “performed well in his first Annual Meeting as CEO, exhibiting a deep understanding of all of BRK’s major businesses and plans to drive operational excellence”. The wit and the storytelling are gone. What replaced them is a detailed operational grip and a willingness to walk through the weeds of railway scheduling, insurance reserving, and capital allocation across dozens of subsidiaries. Abel was joined by Ajit Jain, vice chairman of insurance operations, Adam Johnson who runs consumer products and retailing, and Katie Farmer, chief executive of BNSF Railway. The presence of the operating heads signalled continuity and depth.
Why Berkshire Shares Trade Lower Despite Solid Quarter
The question is why Berkshire shares trade lower when the operating print came in above expectations and the new CEO demonstrated command of the portfolio. Part of the answer is that Berkshire shares trade lower on nothing in particular. The Class B shares drifted fractionally in Monday’s session. No catalyst. No downgrade. The print was solid. The meeting was reassuring. Yet the shares slipped. It reads like profit-taking after a long run, or simply the absence of Buffett’s star power turning into a minor valuation adjustment. The conglomerate is no longer priced as the vehicle of the most famous investor alive. It is priced as a well-run industrial and financial holding company with strong cash generation and a cautious deployment stance.
| Metric | Q1 2025 | Q1 2024 | Change |
|---|---|---|---|
| Operating Earnings | $11.6bn | $9.8bn | +18% |
| Insurance Underwriting | $1.7bn | $1.3bn | +28.5% |
| Cash Hoard | ~$400bn | $360bn | +11% |
| Share Price Move | Down | N/A | Fractional |
Abel on AI and Capital Discipline
Abel addressed artificial intelligence multiple times during the session. His stance: Berkshire will not do “AI for the sake of AI”. The comment was aimed at the tendency of corporate executives to chase the technology as though it were an end in itself. Abel turned one question from a deepfake version of Buffett into a discussion on cybersecurity risk. The framing was operational rather than strategic. AI is a tool. It carries risk. Berkshire will use it where it makes sense and ignore it where it does not. The approach fits the conglomerate’s culture of avoiding fads and focusing on returns on deployed capital. Abel also stated that Berkshire will not break up or divest subsidiaries. “We are a conglomerate, but we are an efficient conglomerate,” he said. “We don’t have layers of management.” The assertion matters because activist pressure to split conglomerates has been a recurring theme across industrials and financials for a decade. Abel is signalling that Berkshire’s structure is not up for negotiation.
The Buffett Presence
Buffett attended but did not run the meeting. Early in the session, Abel raised a jersey to the rafters of the CHI Health Center, commemorating Buffett’s tenure. The gesture landed somewhere between tribute and farewell. At the halfway point, Buffett gave an interview in which he described the current investing environment as “not ideal”. He did not elaborate. The comment fits his longstanding view that valuations are stretched and opportunities are scarce. Berkshire’s $400 billion cash pile supports that read. The conglomerate is not finding enough to buy at prices it likes. It is waiting. The patience is consistent. The execution is disciplined. Yet Berkshire shares trade lower by a fraction, as though the market is taking the measure of the man without the legend in the room.
What Comes Next
The focus shifts to deployment. Berkshire has the balance sheet to buy almost anything. The question is what Abel considers attractive at current multiples. Insurance underwriting is performing. The railway needs improvement and Abel walked through the operational initiatives under way. The consumer and retailing portfolio is stable. The equity portfolio, dominated by listed holdings, has not seen major moves recently. The conglomerate is waiting for value to reappear. The next quarterly print will show whether operating momentum holds and whether any of that cash moved off the balance sheet. Until then, the market is pricing Abel, not Buffett. The discount, if there is one, is marginal. The business is unchanged. The shares reflect that.
This article is for information purposes only and does not constitute investment advice. Readers should not act on any information contained here without first consulting an authorised financial adviser. Past performance is not a reliable indicator of future results.
