Has Berkshire Hathaway (BRK.A 0.33%) (BRK.B 0.36%) lost its luster now that Warren Buffett has stepped down as CEO? Some might think so, but I don't.
Sure, Berkshire has lagged well behind the S&P 500 (^GSPC 1.22%) since Buffett announced at the company's annual shareholder meeting in May 2025 that he planned to pass the torch to Greg Abel. However, I believe there's one especially compelling reason why now is a great time to buy Berkshire Hathaway stock.
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Berkshire's not-so-secret weapon
The reason I think buying Berkshire Hathaway stock can be summed up in one word: optionality. Berkshire has the flexibility to do pretty much anything it wants. Few companies have such a luxury.
It's no secret what the primary factor is behind Berkshire's optionality. The company's cash position was at an all-time high of nearly $382 billion as of the end of the third quarter of 2025. I won't be surprised if the total is even higher when Berkshire announces its fourth-quarter results, considering the conglomerate's ability to generate significant free cash flow.
BRK.B Cash and Short Term Investments (Quarterly) data by YCharts
There's considerable uncertainty in the market. President Trump continues to threaten to impose steep tariffs on major U.S. trading partners. The Federal Reserve seems unlikely to cut interest rates further. Job growth is anemic at best.
I view Berkshire's cash stockpile as a huge insurance policy. Should the economy and/or the stock market tank, the company's cash provides an unmatched cushion. Berkshire would also be among the best positioned to take advantage of a downturn by using its money to buy stocks, acquire other businesses, or both.
NYSE: BRK.B
Key Data Points
A capable leader to wield the weapon
Buffett's ability to deploy capital was legendary. However, Berkshire Hathaway still has a capable leader to wield its not-so-secret weapon of a ginormous cash position.
It's worth remembering what Buffett said when he announced that he would pass the baton to Abel. He stated in the May 2025 shareholder meeting, "I think the prospects of Berkshire will be better under Greg's management than mine."
Buffett's money is where his mouth is. He hasn't sold a single Berkshire Hathaway share since.
My hunch is that we'll see Abel invest Berkshire's money in a similar way to Buffett (he has learned much from the master), albeit with a few differences. For example, I suspect Abel could deploy more capital in international investments. He could also be more open to buying tech stocks than Buffett was. Berkshire's big purchase of Google parent Alphabet (GOOG 1.54%) (GOOGL 1.70%) shares last year could reflect Abel's influence.
Could Abel even lead Berkshire to initiate a dividend? I wouldn't bet the farm on it. However, I won't dismiss the possibility, either.
Still a Buffett stock, but more than a Buffett stock
Berkshire Hathaway remains a Buffett stock. Its portfolio is still primarily composed of stocks Buffett bought. Buffett put its management team in place. Its philosophy is one Buffett instilled.
Furthermore, Buffett remains Berkshire's largest shareholder (by far). He also continues to serve as the company's board chair.
However, Berkshire is more than a Buffett stock. It's a diversified conglomerate with operations in nearly every sector. Berkshire is almost like an exchange-traded fund (ETF) masquerading as a corporate entity. The company's success isn't dependent on one person, whether we're talking about Buffett or Abel.
As it has been for years, though, Berkshire Hathaway is the ultimate sleep-well-at-night stock. The company's massive cash stockpile, which makes Berkshire a safer haven than most, bolsters this status. With shares down more than 10% from the peak set in the first half of 2025, I view Berkshire as an excellent stock to buy on the dip.
