Berkshire Hathaway has achieved its largest performance lead over the S&P 500 since 2010. As of Thursday, the company outperformed the index by 19.2 percentage points. During this period, Berkshire Class B shares increased by 13.2% to reach a record high, while the S&P 500 index declined by 3.7%.
The shift follows a selloff in artificial intelligence stocks, notably Nvidia, which has lost nearly $1.4 trillion in market value since its October 6 peak. Nvidia shares dropped 9.26% on November 5 alone, as investors expressed concerns regarding the profitability of data center investments and potential regulatory scrutiny.
Despite the stock performance, Berkshire's underlying business results show a decline. Operating earnings fell 5.8% to $12.7 billion, with insurance underwriting profits dropping 43% due to performance at GEICO. CEO Greg Abel has focused on share buybacks, repurchasing $9.6 billion of stock in the third quarter and an additional $2 billion in October.
Berkshire currently holds $377.4 billion in cash. The performance gap between the company and the S&P 500 has already begun to narrow, reaching 16.9 points by the close of trading on Tuesday. Market data indicates this is the fourth-largest performance gap recorded over the past 30 years.
