Research · Sep 3, 2026
[BRK-B] Berkshire Hathaway Thesis 2026: Greg Abel Inherits $355B Cash and the Capital Allocation Question
Berkshire Hathaway FY2025 operating earnings ~$50B from four pillars (insurance ~42% via underwriting + investment income, BNSF ~12%, BHE ~10%, manufacturing/service ~28%); reported net earnings ~$95B (mark-to-market driven). Cash + Treasuries reached ~$355B (from $144B FY2021) as Buffett reduced Apple position dramatically through FY2024 ($143B sold) and accumulated cash. FY2026 thesis: Greg Abel CEO transition (effective end-2025) — first time Berkshire has been led by someone other than Buffett in 60 years; capital allocation question: deploy $355B cash into operating acquisitions, equities, or sustain hoard until valuations attractive; insurance float advantage durable; succession risk centers on whether patient-capital culture survives Buffett transition or market pressure reshapes capital allocation philosophy.