Berkshire Hathaway reported a 16% increase in operating earnings for the second quarter, rising to $12.98 billion from $11.16 billion a year earlier, driven by strong performances in its energy, railroad, and manufacturing segments. Manufacturing, service, and retailing earnings surged 24% to $4.47 billion, while Berkshire Hathaway Energy's profit climbed 27% to $891 million. BNSF, the company's railroad unit, posted a 6% increase in earnings to $1.56 billion. However, the insurance segment was a weak spot, with underwriting earnings falling 13% to $1.73 billion and insurance investment income declining 9% to $3.06 billion [1].
CEO Greg Abel, who took over from Warren Buffett at the start of the year, has begun deploying Berkshire's record cash hoard. The company repurchased approximately $4.5 billion of its own shares during the quarter, a significant increase from the $235 million spent on buybacks in the first quarter of 2026. This marked a sharp acceleration in capital deployment, though it may have fallen short of some expectations. Berkshire's cash pile decreased to $365.5 billion at the end of June from a record $397.4 billion three months earlier, as the conglomerate invested in buybacks and other investments, including the closing of its acquisition of Taylor Morrison [1].
For the first time in 14 quarters, Berkshire became a net buyer of equities, with nearly $20 billion in net stock purchases during the second quarter. This reversal from a long-standing pattern of selling stocks signals a more aggressive investment approach under Abel's leadership. The company also disclosed that Alphabet is now among its five largest equity holdings by market value at the end of June, joining American Express, Apple, Bank of America, and Coca-Cola. Berkshire revealed a $10 billion investment in Alphabet earlier this year to support AI development, a move initiated by Buffett after consulting with Abel [1].
Despite these moves, Berkshire's shares are up just 3% year-to-date, underperforming the S&P 500's 13% gain, though the stock has risen 9% in the last three months. Shareholders have been urging Abel to deploy more of the company's cash outside of Treasuries, and the recent acceleration in buybacks and equity purchases appears to address these concerns [1].
CONCLUSION
Berkshire Hathaway's strong Q2 operating results and a notable shift toward deploying its massive cash reserves under CEO Greg Abel mark a significant change in strategy. The company's increased buybacks, major investments, and reversal to net equity purchases could signal a more active capital allocation approach going forward. However, the stock's year-to-date underperformance relative to the S&P 500 suggests investors are watching closely for sustained results.