Berkshire Hathaway‘s (NYSE:BRK) stock price soared to an unprecedented peak on Monday, experiencing a 3.4% increase. This surge comes as the conglomerate overseen by billionaire investor Warren Buffett unveiled its quarterly operating profit, which surpassed $10 billion for the very first time.
In its second-quarter earnings report, issued on Saturday, Berkshire Hathaway disclosed that rising interest rates played a crucial role in enhancing profits from fixed-income investments. This includes a substantial cash stake that expanded to $147.4 billion. Moreover, a decrease in accident claims significantly bolstered the performance of Geico car insurance.
This positive momentum effectively counterbalanced the decline in profit from the BNSF railroad and reduced earnings from building product companies, such as Clayton Homes, as well as consumer-oriented businesses like Forest River recreational vehicles and Duracell batteries.
Berkshire Hathaway (NYSE:BRKa), headquartered in Omaha, Nebraska, also announced a quarterly net income of $35.9 billion, showcasing unrealized gains on investments, particularly in Apple (NASDAQ:AAPL). Apple’s stock price witnessed a remarkable ascent of 17.6% in the quarter. Berkshire held a substantial $177.6 billion worth of shares in the tech giant by the end of June.
On Monday, the Class A shares of Berkshire surged by $18,320, reaching a value of $551,920. Consequently, this propelled Berkshire’s market valuation to approximately $799 billion. The shares even attained a peak of $555,800, surpassing the previous record of $544,000 set on March 28, 2022.
Notably, Warren Buffett, who retains ownership of around 15% of Berkshire’s stock, managed to surpass Microsoft co-founder Bill Gates on the global wealth index. As of Forbes magazine’s assessment, he now stands as the fifth-richest person in the world, with a fortune amounting to $121.5 billion.
UBS analyst Brian Meredith, who recommends a “buy” rating for Berkshire, revised the 12-month price target for the Class A shares to $621,591 from the prior $608,000. He described the stock as “an attractive play in an uncertain macro environment.” Similarly, Keefe, Bruyette & Woods analyst Meyer Shields, who rates Berkshire as “market perform,” raised the price target to $565,000 from $545,000.
A distinctive aspect of Berkshire Hathaway’s stock is its lack of division for Class A shares. Meanwhile, its Class B shares usually trade at approximately 1/1,500th of the value of the Class A shares.
Throughout 2023, Berkshire shares have demonstrated an 18% increase, aligning with the performance of the Standard & Poor’s 500 (.SPX) index. Although the shares no longer consistently outpace the index, as was the case when Berkshire was smaller, they continue to exhibit potential for matching or slightly outperforming the index over extended periods with lower volatility.
Warren Buffett, aged 92, has been at the helm of Berkshire since 1965. His conglomerate encompasses a variety of businesses, including those related to energy, car dealerships, real estate brokerage, manufacturing, and various consumer brands such as Dairy Queen, Fruit of the Loom, and See’s Candies.
Featured Image: Megapixl @ Rafaelhenriquepress
Author Faith Yakubu 
