A major milestone was reached last week when Berkshire Hathaway’s stock shot to an all-time high, putting the company in a strong position to become the first non-technology U.S. company to reach a remarkable $1 trillion market value. The Omaha-based powerhouse saw a 2% increase over the previous week and hit an all-time high of $600,531. This spike was the first instance of the stock exceeding the $600,000 mark within a single day. Just in 2024, Berkshire saw an astounding rise of more than 10%, more than doubling the S&P 500’s return.
With its market capitalization now above $863 billion as of the most recent market close, Berkshire’s quick rise has made it the seventh most valuable company in the US. Owning BNSF Railway, Geico Insurance, and Dairy Queen, this conglomerate represents the traditional sectors and may soon become a member of the exclusive trillion-dollar club, which is currently held by the largest technology companies. The only companies with global market caps above $1 trillion at the moment are PetroChina and Saudi Aramco.
As of December 31, 2022, Berkshire’s valuation stood at $682 billion, according to FactSet data, indicating that it was valued at roughly $777 billion. In about two years, Berkshire Class A shares went from being valued at $500,000 to $600,000. Known as the “Oracle of Omaha,” this 93-year-old investment guru made some very important strategic decisions during this time. They included a $11.6 billion purchase of the insurance company Alleghany, a nearly 30% stake in Occidental Petroleum, and a profitable turnaround at Geico. Buffett also increased his already large and profitable holdings in Japanese trading companies and made calculated investments in Treasury bills totaling billions to profit from rising interest rates.
The company’s fourth-quarter earnings report is expected later this month, and with Berkshire now holding a record cash reserve of over $157 billion at the end of September, investors are looking forward to it.
Talks about Berkshire being one of the “Magnificent 7,” or the stocks that drove the 2023 market rally, have surfaced as the company asserts its seventh place in the market cap hierarchy. In 2023, the Mag 7—Microsoft, Alphabet, Amazon, Apple, Meta Platforms, Nvidia, and Tesla—saw an astounding 75% increase in value. While the majority maintained their remarkable gains into the New Year, Apple saw a 2% retracement and Tesla saw a 22% decline in 2024.
Along with Broadcom and Eli Lilly, Berkshire is ranked as one of the top three stocks that could displace Tesla in the Mag 7 group by renowned Wall Street research firm Strategas Securities. Strategas claims that Berkshire is currently the best choice to become a member of this powerful group based on earnings contribution to the S&P 500 and market cap weighting.
Each of Berkshire’s original Class A shares sells for roughly 45% more than the median price of a home in the United States, making them among the most expensive shares on Wall Street. Buffett’s stance against stock splits stems from his conviction that a high share price draws and keeps quality-focused, long-term investors. In 1996, however, Berkshire launched Class B shares, which were priced at one-thirtieth of a Class A share, to appeal to smaller investors who wanted a more accessible way to benefit from Buffett’s investment expertise. Berkshire’s Class B shares in 2024 saw a remarkable increase of more than 11% and set an intraday high of $399.15 earlier in the week.
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