Berkshire Hathaway ended the first quarter with a record $397 billion in cash, equal to more than a third of its $1.1 trillion market cap, as new CEO Greg Abel deployed capital into a $6.8 billion homebuilder acquisition and a $10 billion Alphabet private placement.
Berkshire Hathaway Inc. ended the first quarter with a record $397 billion in cash and equivalents, up from $373 billion at the end of last year, giving new Chief Executive Officer Greg Abel the largest war chest in corporate history to deploy as he reshapes the conglomerate's portfolio.
"The cash position is extraordinary, but what matters is what Abel does with it," said Cathy Seifert, analyst at CFRA Research. "His background as an operator suggests he may consolidate Berkshire's units to achieve greater scale and efficiency rather than simply hoarding cash."
Abel, who took over from Warren Buffett on Jan. 1, has already moved aggressively. In his first major deal, Berkshire agreed to acquire homebuilder Taylor Morrison for $6.8 billion, or $72.50 a share — a 24 percent premium to its undisturbed price. He also anchored a $10 billion private placement in Alphabet Inc., split evenly between Class A and Class C shares at a roughly 6.5 percent discount, pushing Berkshire's total Alphabet stake past $29 billion. The company restarted buybacks with a $234 million repurchase in March after a 21-month pause.
The moves mark a sharp departure from Buffett's playbook. Abel exited 16 positions entirely in the first quarter, shrinking the equity portfolio from 42 holdings to 29, and was a net seller of roughly $8 billion in stocks. He concentrated capital in Alphabet — a bet that addresses what the late Charlie Munger called one of Berkshire's "most shameful" misses, having passed on Google's 2004 IPO. Alphabet shares have surged 89 percent over the past 12 months to about $357, fueled by first-quarter revenue of $109.9 billion, up 22 percent year over year, with Google Cloud revenue crossing $20 billion for the first time.
What Abel's early moves mean for Berkshire's direction
The Taylor Morrison deal ties Berkshire to a national housing shortage, while the Alphabet bet gives it exposure to artificial intelligence through Google Cloud's AI infrastructure spending. Buffett, who remains chairman, publicly praised the homebuilder acquisition, saying Abel executed it faster and more smoothly than he could have himself.
On valuation, Berkshire trades at about 1.5 times book value, close to its 10-year average, and roughly 15 times earnings. First-quarter operating earnings rose 18 percent year over year, driven by the insurance units whose float provides cheap capital. The equity portfolio, worth more than $300 billion, includes Apple as its largest holding at about 22 percent, followed by American Express, Coca-Cola, and Bank of America.
The $397 billion question: Can Abel deploy it as well as Buffett?
The record cash pile — equal to more than a third of Berkshire's $1.1 trillion market capitalization — gives Abel firepower to pounce if markets sell off. But it also raises the stakes on deployment. A misjudged megadeal is the clearest downside, and the growing technology tilt adds both opportunity and risk to a portfolio that long avoided the sector.
With nearly $400 billion still in reserve and a CEO who has shown he will act, the Abel era looks like continuity with a harder edge. The next deal may come sooner than investors expect.
This article is for informational purposes only and does not constitute investment advice.
