Shares of conglomerate Berkshire Hathaway (BRK.A 0.46%)(BRK.B 0.34%) have been in a bit of a holding pattern since long-time Chief Executive Officer Warren Buffett said last year that he was stepping down at the end of 2025. That's not unreasonable. The new CEO, Greg Abel, has big shoes to fill, given Buffett's immense success at the helm of Berkshire Hathaway. Here are three reasons you might want to jump in and buy the stock despite the leadership change.
1. Greg Abel is an insider
Warren Buffett was Berkshire Hathaway CEO for decades. Under his leadership, the stock vastly outperformed the S&P 500 index (^GSPC 1.52%). A key factor in the company's success was Buffett's investment approach of buying good businesses while they are attractively priced and then holding for the long term. In many ways, buying Berkshire Hathaway was basically a way of investing alongside Buffett.
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That's clearly no longer the case, as Abel took over the CEO spot at the start of 2026. However, there are a couple of important facts to consider. First, Abel has been working under Buffett for decades. He is well versed in the Buffett approach. Given the success of that approach, it is highly unlikely that Abel will make drastic changes. He might make some alterations at the edges (more on that below), but it would be shocking to see him abandon the business model and go in a different direction.
Adding to the theme of management continuity, Buffett remains Abel's boss. That's because Buffett is staying on as chairman of the board of directors. Buffett tends to take a hands-off approach, so he's likely to let Abel do his own thing. However, Buffett is unlikely to sit idly by if Abel starts to make changes that are too extreme or not well thought out.
2. Buffett left a big gift
Therefore, it's likely that Berkshire Hathaway will continue to be run in a similar manner in the future as it has been in the past. However, Buffett didn't just hand over the CEO baton. He also handed over a balance sheet with $380 billion of cash and short-term investments on it as of the end of the 2025 third quarter. That is a shockingly large number.
NYSE: BRK.A
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This cash hoard provides Abel with a huge safety net. He could make multiple mistakes, and Berkshire Hathaway would endure. However, it also serves as a safety net against a recession, as the cash would act as a bulwark against a financial downturn.
The cash is also an opportunity, since it gives Abel the wherewithal to invest in the business he is now running. Historically, Buffett would have used that money to fund acquisitions of entire companies or large investments in publicly traded stocks. Abel is likely to do both, as well, but he is a more active manager than Buffett. So there's a capital investment opportunity here if he reinvests that cash in the businesses under the Berkshire Hathaway umbrella.
3. Abel could clean up Buffett's neglect
Berkshire Hathaway is a giant conglomerate, with more than 180 owned businesses and a portfolio of investments in publicly traded companies. Buffett has long taken a hands-off approach to the subsidiary businesses, instead focusing on buying new companies and making stock investments. Abel is more operations-oriented and may be more actively involved in running Berkshire Hathaway's subsidiaries.
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That wouldn't be a bad thing. Berkshire Hathaway has performed well as a business under Buffett's tutelage. However, the company's vast size suggests that there are likely to be numerous opportunities for improvement. Inefficiencies often creep into large companies as a normal part of business operations.
If all Abel does is work to improve the operating results of the companies Berkshire Hathaway owns, his tenure could ultimately prove to be a huge success. As noted, he has the financial resources to make any necessary investments, so this outcome is likely to be part of whatever path he takes with Berkshire Hathaway.
Berkshire Hathaway is unlikely to flounder
The CEO transition at Berkshire Hathaway is big news, but it's unlikely to drastically alter the company's future. Greg Abel is well-trained in Buffett's ways. He has ample cash to cushion against mistakes or make big investments. And Abel's more active management style could actually prove to be a huge benefit to the company's financial performance.
