Berkshire Hathaway's stock surged by 4%, reaching a new peak following a strong earnings report and Warren Buffett's annual letter, increasing Buffett's wealth by $6 billion. This surge highlights Berkshire's robust performance and Buffett's enduring investment strategy in a fluctuating economic landscape.

Berkshire Hathaway Stock Rises 4% To New Record—Making Warren Buffett $6 Billion Richer

Berkshire Hathaway stock hit an all-time high on Monday, propelled by the company's impressive fourth-quarter earnings and Warren Buffett's annual letter to shareholders. This surge significantly increased Buffett's net worth.

Key Takeaways

• Stock Surge: Berkshire Hathaway's Class A shares rose by 4% to close at $747,765.75, while Class B shares climbed 4.2% to $498.97, both setting new records.
• Earnings Report: The company's fourth-quarter earnings revealed $47.4 billion in operating earnings for 2024 (excluding investment gains), a 27% increase from 2023, and $14.5 billion in Q4 operating earnings, a 71% year-over-year increase.
• Market Cap Increase: The best day for Berkshire in over three months added $40 billion to the company’s market capitalization, swelling it to a record $1.08 trillion.
• Buffett's Wealth: Warren Buffett's net worth increased by $6 billion, making him the sixth-wealthiest person globally with a $155 billion fortune.
• Philanthropy: Buffett has donated over $60 billion to charity, marking him as one of history's most prolific philanthropists.

Driving Factors Behind the Surge

Strong Earnings Report

Berkshire Hathaway's impressive earnings report for the fourth quarter of 2024 played a crucial role in the stock surge. The company reported substantial increases in both annual and quarterly operating earnings:

• $47.4 billion in operating earnings for 2024, excluding investment gains, a 27% increase from 2023.
• $14.5 billion in operating earnings during Q4, a 71% year-over-year increase.

Market Capitalization Milestone

The company's market capitalization reached a record $1.08 trillion, surpassing Tesla to become the seventh-most valuable public American company.

Analyst Confidence

UBS analyst Brian Meredith noted that Berkshire is “an attractive stock in an uncertain macro environment,” highlighting the company's stability amid economic uncertainties influenced by President Donald Trump's policies and Elon Musk's involvement.

Berkshire's Market Performance

Berkshire Hathaway has consistently outperformed the S&P 500, demonstrating its strength and reliability as an investment:

• Up 10% year-to-date, beating the S&P 500’s 2% gain.
• Outperformed the S&P benchmark in 16 of the last 25 years.

Berkshire's Cash Reserves

At the end of 2024, Berkshire's cash pile (cash and short-term investments) stood at $334 billion. In his annual letter, Buffett assured shareholders that the company would deploy a substantial majority of this money in equities.

Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities.

Warren Buffett, 2025 Annual Letter

Apple's Influence

Apple, Berkshire's largest investment by total value, also contributed to the stock's rise. Shares of Apple increased following the announcement of a $500 billion investment in the U.S. over the next four years. Apple accounts for approximately 25% of Berkshire’s public portfolio, with Buffett's company owning 2% of Apple.

Buffett's Tax Contribution

Berkshire Hathaway paid $26.8 billion in taxes to the IRS last year, which Buffett claims is the most any company has ever paid, representing 5% of all corporate taxes in 2024.

Berkshire would not have achieved its results in any locale except America whereas America would have been every bit the success it has been if Berkshire had never existed. So thank you, Uncle Sam.

Warren Buffett

This substantial tax payment reflects Berkshire's significant financial success and contribution to the U.S. economy.