Please ensure Javascript is enabled for purposes of website accessibility

Why Berkshire Hathaway's Shares Popped 11.6% in August

By Travis Hoium – Updated Sep 8, 2020 at 8:48AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A big tech stock gave Warren Buffett big gains in August.

What happened 

Shares of Berkshire Hathaway (BRK.A 2.25%) (BRK.B 2.34%) jumped 11.6% in August, according to data provided by S&P Global Market Intelligence, as its biggest holding rose sharply. Berkshire Hathaway may not be a technology stock, but it does own a lot of Apple (AAPL -2.38%) stock, and that helped shares last month. 

So what 

Berkshire Hathaway owns a whopping 980.6 million shares of Apple stock, worth nearly $90 billion today. And that alone is enough to push the stock higher. Apple stock was up 21.4% in August, worth $22.3 billion.

BRK.A Chart

BRK.A data by YCharts

It didn't hurt that the S&P 500 (of which Apple is also a member) was up 7% during the month. As a large conglomerate, Berkshire Hathaway will often move with the market and last month it simply outperformed by a small amount. But it was Apple that likely drove the outsized gains

Blocks with arrows showing growth like a chart.

Image source: Getty Images.

Now what 

Today, Berkshire Hathaway's market cap is $521.5 billion, so the $22.3 billion it made in Apple last month is a sizable increase. The company doesn't often trade along with just one of its holdings, but in this case the Apple stake is so big that it makes sense for Berkshire stock to rise when Apple does. 

What I'm going to watch over the next few months is what Berkshire Hathaway does with its Apple stake. The company could just sit on it, collecting a dividend and betting shares rise. Given Warren Buffett's history of holding stocks for the long term, that's what investors should expect. But this is a big move into tech stocks for Berkshire Hathaway, so investors should expect anything at this point. 

Travis Hoium owns shares of Apple and Berkshire Hathaway (B shares). The Motley Fool owns shares of and recommends Apple and Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short September 2020 $200 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
$410,543.76 (2.25%) $9,053.76
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
$271.69 (2.34%) $6.22
Apple Inc. Stock Quote
Apple Inc.
$148.16 (-2.38%) $-3.60

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.