Berkshire Profit Rises as Abel Begins Deploying Buffett's Giant Cash Pile

Berkshire Hathaway recorded a 16% increase in operating profit in the second quarter of 2026, bolstered by strength in its energy, rail, and manufacturing segments, while the insurance unit weakened. However, the main focus of the report was not just the profit figures, but CEO Greg Abel’s move to begin activating the giant cash pile inherited from Warren Buffett for share buybacks and stock purchases. Operating profit rose to $12.98 billion from $11.16 billion in the same period a year earlier. The manufacturing, services, and retail segment surged 24% to $4.47 billion, while Berkshire Hathaway Energy posted a 27% profit jump to $891 million. BNSF, Berkshire’s railway company, recorded a 6% increase to $1.56 billion. On the other hand, the insurance segment was a weak spot, with underwriting profit falling 13% to $1.73 billion from $1.99 billion a year earlier, and insurance investment income dropping 9% to $3.06 billion. Berkshire bought back approximately $4.5 billion of its own shares during the quarter, the second fiscal quarter under Abel’s leadership after he officially succeeded Buffett at the start of the year. This figure soared from the $235 million in buybacks in the first quarter of 2026, though it still fell short of some market expectations. Berkshire’s cash pile shrank to $365.5 billion at the end of June, down from a record $397.4 billion three months earlier, as the company deployed capital through buybacks and other investments. One major corporate action during the quarter was the completion of Berkshire’s acquisition of Taylor Morrison. Notably, Berkshire reversed its pattern of stock sales and became a net buyer of equities in the second quarter, with net purchases of nearly $20 billion. This marks a significant moment, as Berkshire had previously been a net seller of stocks for 14 consecutive quarters. Buffett, now serving as chairman, left Abel a cash fortress unprecedented in corporate America, consistent with the 95-year-old legend’s patient and risk-averse investment style. Buffett had previously acknowledged the difficulty of finding fairly valued assets in the stock market, while shareholders continued to pressure Abel to start using some of the cash beyond Treasury instruments. Berkshire shares have risen only 3% this year, lagging far behind the S&P 500’s 13% gain, though the stock has moved positively recently with a 9% increase in the last three months. A regulatory filing showed that Alphabet has now entered Berkshire’s top five stock holdings by market value as of the end of June, joining long-term holdings such as American Express, Apple, Bank of America, and Coca-Cola. Berkshire had previously disclosed a $10 billion investment in Google’s parent company to support AI development, and Buffett confirmed he initiated the Alphabet investment after consulting with Abel.