Berkshire Hathaway (BRK.A 0.26%)(BRK.B 0.25%) has entered a new phase of its existence. At the end of 2025, longtime Chief Executive Officer Warren Buffett handed off his job to top lieutenant, Greg Abel. Given Buffett's long and incredibly successful tenure, it is reasonable for investors to worry about the future. However, there's one very significant reason to still consider buying the stock.
The big change at Berkshire Hathaway
Berkshire Hathaway is an unusual company. Although its insurance operations generally leave it classified as a finance company, it is actually a widely diversified conglomerate. It is challenging to convey the company's extensive diversification, as it owned 189 subsidiary companies as of the end of 2024.
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That, however, is in keeping with Buffett's general approach. He operated Berkshire Hathaway as his investment vehicle. Buying the stock was, basically, a decision to hire Buffett to manage your money. In some ways, it operated like a mutual fund, noting that in addition to the owned companies, it also has a large portfolio of publicly traded stocks.
In fact, most investors bought Berkshire Hathaway because they wanted to invest alongside Buffett. With Buffett having handed over the CEO role to Abel, however, that is no longer a reason to buy the stock. To be fair, Buffett is set to remain chairman of the board of directors, so he will still be Abel's boss. Moreover, Abel has worked for Buffett for decades, so he's well versed in the former CEO's approach.
Still, Abel isn't Buffett, and the new CEO will run the company in a different manner. This is probably the largest change at Berkshire Hathaway since Buffett took control of the business, which was then a clothing manufacturer.
Why you might want to buy Berkshire Hathaway now
It would be completely reasonable for investors who own Berkshire Hathaway solely because of Buffett to sell the stock. However, there is still one very large reason to buy it. You could argue that there are actually 381 billion reasons.
NYSE: BRK.A
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That's the number of dollars Berkshire Hathaway was holding on its balance sheet in cash or short-term investments at the end of the third quarter of 2025. With Buffett handing off a cash hoard of $381 billion, he is giving Abel a huge financial cushion. The new CEO could make a few mistakes, and the company would likely survive them quite easily.
That cash also gives Abel the firepower to make growth-oriented acquisitions. It isn't clear how the new CEO intends to invest the money. Given Buffett's continuing presence at the company and Abel's training, it seems likely that Abel will continue to favor buying well-run businesses when they are trading at attractive valuations.
NYSE: BRK.B
Key Data Points
There are some indications that Abel is likely to be more involved in the day-to-day operation of subsidiary companies. Even there, however, the cash hoard has material value, because the money could be used to make growth-oriented capital investments or to streamline subsidiary operations.
Even in a worst-case scenario of a deep recession, the outlook is fairly positive. Berkshire Hathaway's strong financial condition would give it the ability to weather the storm relatively unscathed. In fact, a deep recession could be quite positive because it would likely create opportunities for Berkshire Hathaway to acquire other companies or shares at discounted prices.
Berkshire Hathaway after Buffett
When you look at Berkshire Hathaway today, you have to ask yourself why you want to own it. If the only reason you were ever interested in owning the stock was Buffett, then you probably shouldn't buy it now that he's no longer CEO. However, if the widely diversified conglomerate's business is attractive to you, then it is probably still worth considering with Abel at the helm.
There is a risk that Berkshire Hathaway will be a different business now that Buffett is no longer at the helm. Still, the $381 billion in cash on the balance sheet is a good reason to give Abel the benefit of the doubt as he puts his imprint on the widely diversified conglomerate.
