The S&P 500 (^GSPC 0.61%) is down about 9% from its 2025 high, and the Nasdaq Composite (^IXIC 0.93%) is still firmly in correction territory. But not all stocks are beaten down, and one major outperformer has been Berkshire Hathaway (BRK.A 0.24%)(BRK.B 0.38%).
Although the major stock market averages are lower for the year, Berkshire has gained more than 17% through the first three months of 2025. This has pushed Berkshire to a $1.14 trillion market cap. In fact, it's now the only stock in the trillion-dollar club that's not a tech company.
NYSE: BRK.B
Key Data Points
Berkshire's strong performance
There are some good reasons the company has performed so well. For one thing, it's typically considered to be a "safe" stock in tough times, as it owns a collection of recession-resistant businesses and has tons of cash on hand. With the recent uncertainty in the market, "safe" stocks have generally outperformed.
In addition, Berkshire's fourth-quarter earnings report showed strong results throughout the business. As I just alluded to, it showed that Berkshire had a record $334 billion of cash on its balance sheet. This gives the company incredible financial flexibility to take advantage of investment opportunities that arise, which could also be fueling investor optimism that Warren Buffett and his team may start actively putting money to work.
Berkshire is often thought of as a recession hedge -- not only because of its cash, but also because its businesses tend to hold up well regardless of what the economy or stock market is doing. Think of the GEICO insurance subsidiary. People still need auto insurance, even if a recession hits.
The same can be said for the electric and gas bills that come from Berkshire Hathaway Energy. Berkshire definitely has some cyclical businesses, but most of its larger subsidiaries are somewhat insulated.
Cheaper than it looks
There are three main components to Berkshire:
- Wholly-owned subsidiary businesses
- Its stock portfolio
- Cash and equivalents
The latter two components are pretty straightforward. As mentioned, Berkshire's cash and equivalents are roughly $334 billion, and the stock portfolio has a market value of about $288 billion, as of this writing.
If I back those out from Berkshire's $1.14 trillion market cap, the company's operating businesses are valued at about $518 billion. Berkshire generated $33.8 billion in operating income last year, excluding investment income. This means that its operating businesses are valued at about 15 times earnings, a completely reasonable valuation, considering their strong performance lately and their recession-resistant nature.
Should you buy Berkshire while it's still below $550?
There are two classes of Berkshire Hathaway shares, and I'm referring to the Class B version in my "below $550" discussion. Berkshire Class A shares, which represent 1,500 times the equity in the company, are trading for roughly $800,000 each.
The bottom line is that Berkshire Hathaway isn't exactly a cheap stock but still appears to be trading at a fair price. It could be a smart buy right now if you're a long-term investor, especially if you're worried about a recession or stock market crash in the near future. After all, Berkshire's massive cash position gives it an unmatched ability to take advantage of stock market weakness or acquisition opportunities.
However, it's important to realize that Berkshire's stock price can be volatile over short periods, and it's entirely possible for the share price to decline even if things are going well for the business. In a nutshell, I'm almost certain that Berkshire Hathaway will be worth substantially more in a decade than it is today, but the path there isn't likely to be a straight line.
