While global equities have cratered year-to-date, Berkshire Hathaway ($BRK.B) has defied gravity, surging 14% during this period. Warren Buffett, the Oracle of Omaha, has once again proven his genius, having built a financial fortress set to withstand all sorts of turmoil.
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Berkshire’s massive $334 billion cash pile is at the core of this stronghold, cushioning the conglomerate while supporting the possibility of opportunistic acquisitions. In the meantime, its portfolio includes defensive businesses, from Geico to Coca-Cola (KO), further positioning it to endure both short-term and long-term challenges.
Berkshire Hathaway B (BRK.B) vs. S&P 500 (SPY)
For these reasons, I expect Warren Buffett and Berkshire Hathaway to outperform the market, so I’m bullish on BRK stock.
Is it Better to Buy BRK.A or BRK.B?
Berkshire Hathaway trades under two ticker symbols: $BRK.A and $BRK.B. BRK.A is the original, higher-priced share, while BRK.B was introduced in 1996 as a more affordable option for individual investors. The two share classes differ in price, voting rights, and convertibility. BRK.A carries more voting power and can be converted into BRK.B shares, not vice versa.
BRK.B shares underwent a 50-to-1 stock split in 2010, making it even more accessible. Despite these differences, both share classes represent the same ownership in Berkshire Hathaway stock and deliver identical investment performance. Investors can choose based on their budget and voting preferences without compromising their exposure to the company’s returns.
A Cash Pile That Powers Opportunity
Berkshire’s $334 billion cash hoard is massive and helps the conglomerate in two significant ways in today’s market environment. First, it generates a substantial stream of risk-free income, mainly through short-term Treasury bills yielding around 4.5%. This translates to roughly $15 billion annually.
To illustrate the scale of BRK, if its cash position alone were a company of its own, it would be a cash flow titan that rivals the net income of many Fortune 500 firms. This effortless income stream fortifies Berkshire’s balance sheet, allowing Buffett to ignore market panics. This passive interest income offers stability in elevated rates and economic uncertainty. It also frees Buffett to invest their time in a long-term strategy instead of firefighting short-term crises.
Main Street Data showing Berkshire Hathaway’s balance sheet since 2019
Secondly, and more importantly, this cash pile is also a vast war chest of firepower that positions Berkshire to seize once-in-a-generation opportunities. As tariffs batter quality businesses, driving valuations to multiyear lows, Buffett is likely circling distressed assets with predatory intent. He has a long history of doing precisely that, like when he acquired Geico in the 1990s, BNSF during the 2008 crisis, and BYD as part of the EV mania sweeping the world. With industries like manufacturing, retail, and even energy reeling, Buffett could target a transformative deal, perhaps a family-owned legacy business or a beaten-down industrial giant.
Defensive Holdings Built for Resilience
Beyond the never-ending cash hoard, Berkshire’s portfolio of public and private businesses is another pillar of its strength, as it is designed to withstand the worst downturns. The tariff-induced headwinds shouldn’t be challenging to overcome either. Like Geico and BNSF Railway, its core holdings are quintessential defensive plays.
As a leading auto insurer, Geico benefits from steady demand regardless of trade policies, as car insurance remains a non-negotiable expense for millions. In the meantime, BNSF makes for an irreplaceable American logistics asset. This is because the railroad giant transports essential goods across the U.S., a role that tariffs may disrupt but won’t derail, given its domestic focus. Historically, these businesses have generated consistent cash flows, shielding Berkshire from the volatility pounding more cyclical sectors, and this time should be no different.
Berkshire Hathaway B (BRK.B) price action since the start of 2025
On the public side, Berkshire’s stakes in stalwarts like Coca-Cola (KO) and American Express (AXP) further insulate it. Coca-Cola’s global brand, essential product line, and locally based production effectively guarantee steady sales, even as tariffs raise costs elsewhere. And then, American Express, with its affluent customer base, thrives on resilient consumer spending among high earners, who are less affected by the trade war fallout.
Even Berkshire’s recent bets, like its increased stakes in Japan’s trading houses (Itochu, Mitsubishi, and others), are tariff-resistant, as these firms operate diversified global supply chains that can pivot around trade barriers. Such a defensive yet dynamic mix of quality companies has drawn investors to Berkshire’s stock (and vision).
A Valuation That Still Beckons
Despite Berkshire’s market-beating rally, today’s stock price is compelling and justified. Shares are now trading at 1.7x their book value. Historically, the company has traded at an average of about 1.4 to 1.5x, indicating a premium versus today’s valuation. In fact, it also means that a part of its recent returns are driven by valuation expansion.
Berkshire Hathaway B (BRK.B) estimated and reported earnings history
Then again, given that Berkshire is the only megacap providing shelter these days, it is not surprising investors are willing to pay extra to park their money at a place they can trust. In the meantime, the modest premium reflects the possibility of Berkshire executing a transformative deal that could prove highly accretive, as today’s environment presents more opportunities than challenges for the conglomerate.
Is Berkshire Hathaway Stock a Buy, Sell, or Hold?
Wall Street analysts remain relatively bullish on BRK.B stock, despite the departure from its historical valuation range. The stock has a Moderate Buy consensus rating based on two Buy and one Hold ratings over the past three months. BRK’s average price target of $519.50 implies that shares are fairly valued at their current levels, with less than 1% upside potential over the next twelve months.
As Trump’s tariffs roil global markets, Berkshire Hathaway again represents Warren Buffett’s enduring brilliance. The conglomerate’s $334 billion cash pile delivers effortless income and predatory buying power, poised to capitalize on market distress.
Meanwhile, its defensive empire, from Geico’s steady premiums to Coca-Cola’s timeless brand, shields it from trade war chaos. Therefore, Berkshire offers a rare blend of safety and opportunity for investors rattled by uncertainty. If the market’s upheaval persists, Buffett’s baby will likely keep beating the market despite today’s valuation premium.
