Berkshire Hathaway’s Stock Performance Amid CEO Transition
Berkshire Hathaway’s B shares have rebounded 7.2% since hitting a near-term low of $459.11 on August 4, 2025. Despite this recovery, the shares still reflect a modest year-to-date gain of 8.6%, closely matched by the A shares at 8.5%. This performance contrasts with the broader S&P 500, where Berkshire is lagging by its largest margin so far this year.
The decline earlier in the year followed Warren Buffett’s unexpected announcement in early May that he will step down as Berkshire’s CEO by year-end. This leadership transition has introduced uncertainty, contributing to the stock’s volatility.
Apple Stake Reduction: A Costly Decision
Apple Inc., which represents 6.35% of the S&P 500 index, closed at a record high of $262.82 per share recently, marking a gain of more than 50% since Berkshire began trimming its position in late 2023.
Between September 30, 2023, and June 30, 2025, Berkshire reduced its Apple shares from nearly 916 million to 280 million, a 69% cut. Although Apple remains Berkshire’s largest equity holding, this substantial divestment has resulted in significant unrealized gains being forgone.
Assuming no further changes in the third quarter, the current stake is valued at approximately $74 billion, compared with a hypothetical $241 billion had Berkshire retained all shares. This $167 billion valuation gap highlights the opportunity cost of the sales.
According to Barron’s analysis, Berkshire realized pretax gains of roughly $96 billion from the sales, but paid an estimated $20 billion in taxes, leaving an approximate $50 billion in potential profits “left on the table.”
Buffett’s Rationale: Anticipated Tax Increases
Warren Buffett has provided limited public commentary on the Apple share reduction. His most detailed explanation came during Berkshire’s 2024 annual shareholder meeting, where he indicated that anticipated increases in capital gains tax rates motivated the decision.
“We don’t mind paying taxes at Berkshire. We are paying a 21% federal rate on the gains we’re taking in Apple, which was 35% not long ago and even higher in the past,” Buffett said. He added, “I think higher taxes are quite likely, and shareholders may appreciate paying a lower rate now rather than a higher rate later.”
Buffett reaffirmed his expectation that Apple would remain Berkshire’s largest equity position well into the future, despite the sales.
Berkshire’s Jazwares Expands with FIFA World Cup Licensing
Berkshire Hathaway’s toy subsidiary Jazwares, known for the popular “Squishmallows” plush toys, announced two new licensing partnerships this week. Jazwares will serve as the official worldwide plush licensee for the 2026 FIFA World Cup.
The company plans to launch a product line next June, including the official mascot of the tournament, capitalizing on the global event’s marketing potential.
FinOracleAI — Market View
Berkshire Hathaway faces a pivotal year as it navigates leadership change and portfolio adjustments. The CEO transition has introduced volatility, while the significant reduction in Apple shares has resulted in substantial missed gains amid a soaring market price.
- Opportunities: Continued strong performance of remaining core holdings, potential for new leadership to drive strategic portfolio shifts, and Jazwares’ expansion into global sports licensing.
- Risks: Market skepticism around Buffett’s departure, uncertainty over future capital gains tax policy, and the impact of large-scale equity sales on portfolio returns.
Impact: While Berkshire’s stock has rebounded, the lag behind the S&P 500 and the costly Apple stake reduction underscore challenges ahead. The company’s adaptability to leadership transition and market conditions will be critical to restoring investor confidence and performance momentum.
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