In the latest market news out of Omaha, Berkshire Hathaway reported that operating earnings climbed 16% in the second quarter, driven by strength in its energy, railroad and manufacturing businesses that offset softer results in insurance, according to CNBC. The results also revealed a notable shift in strategy under new CEO Greg Abel, who has begun putting Warren Buffett's record cash hoard to work through stock buybacks and fresh equity purchases.
Operating earnings rose to $12.98 billion from $11.16 billion a year earlier, CNBC reported. Berkshire's manufacturing, service and retailing division posted a 24% jump in earnings to $4.47 billion, while Berkshire Hathaway Energy's profit surged 27% to $891 million. BNSF, the company's railroad unit, saw earnings increase 6% to $1.56 billion. Insurance underwriting earnings fell 13% to $1.73 billion from $1.99 billion, and insurance investment income declined 9% to $3.06 billion, according to the network.
Abel Accelerates Buybacks
Berkshire repurchased approximately $4.5 billion of its own shares during the second quarter, CNBC reported, marking the second full fiscal period under Abel, who officially took over from Buffett at the start of the year. That figure represents a sharp acceleration from the $235 million spent on buybacks in the first three months of 2026, though CNBC noted it may have come in below some investor expectations heading into the earnings report.
The pickup in buybacks and other capital deployment helped shrink Berkshire's enormous cash reserves. The company's cash pile declined to $365.5 billion at the end of June from a record $397.4 billion three months earlier, according to CNBC, as Berkshire funneled capital into buybacks, acquisitions and equity purchases. The quarter also included the closing of Berkshire's acquisition of homebuilder Taylor Morrison.
A Reversal in Stock Buying
Perhaps the most significant shift highlighted in the market news from Berkshire's filing was the company's return to being a net buyer of equities. Berkshire made nearly $20 billion in net stock purchases during the second quarter, CNBC reported, ending a streak of 14 consecutive quarters in which the conglomerate had been a net seller of stocks. That long stretch of selling had defined much of Buffett's recent approach to the market, as he repeatedly signaled difficulty finding attractively priced opportunities.
Buffett, who transitioned to the role of chairman when Abel took over as CEO, had built up the unprecedented cash fortress in keeping with his famously patient and risk-averse investing philosophy. According to CNBC, Buffett had for some time indicated he was struggling to identify good value in the broader equity market. That caution left Berkshire sitting on hundreds of billions of dollars in cash and short-term Treasuries, prompting growing pressure from shareholders for Abel to eventually put that capital to more productive use.
Alphabet Joins Top Holdings
Among the biggest revelations in the filing was confirmation that Alphabet, the parent company of Google, is now counted among Berkshire's five largest equity holdings by market value as of the end of June, CNBC reported. Alphabet now sits alongside Berkshire's longtime core holdings: American Express, Apple, Bank of America and Coca-Cola. Berkshire had earlier disclosed a $10 billion investment in Alphabet, a move intended to help fund the tech giant's artificial intelligence development. Buffett told CNBC that he initiated the Alphabet investment after consulting directly with Abel, underscoring the collaborative nature of the leadership transition even as day-to-day capital allocation decisions increasingly fall to the new CEO.
Stock Performance Lags the Broader Market
Despite the improved earnings and the shift toward more active capital deployment, Berkshire's stock performance has trailed the broader market this year. Shares of Berkshire are up just 3% year to date, according to CNBC, significantly underperforming the S&P 500's 13% gain over the same period. However, the stock has shown recent momentum, rising 9% over the last three months, suggesting investors may be responding positively to signs that Abel is willing to deploy capital more aggressively than his predecessor did in recent years.
What the Transition Means Going Forward
Abel's early moves as CEO are being closely watched as a signal of how he intends to manage the company differently, or similarly, to Buffett. The acceleration in buybacks from $235 million in the first quarter to $4.5 billion in the second suggests a willingness to return capital to shareholders when Abel judges Berkshire shares to be undervalued. At the same time, the nearly $20 billion in net equity purchases, ending more than three years of net selling, indicates Abel may see more opportunities in public markets than Buffett did during his final years steering day-to-day investment decisions.
The Financial Times also covered the earnings shift, noting that Abel is now actively working through the cash pile Buffett accumulated, though full details of the FT's analysis remain behind its subscription paywall.
What To Watch Next
Investors and market watchers will be paying close attention to whether Berkshire continues its accelerated pace of buybacks and stock purchases in coming quarters, and whether the remaining $365.5 billion cash pile continues to shrink as Abel identifies further opportunities. The performance of new holdings like Alphabet, alongside the fate of the recently closed Taylor Morrison acquisition, will offer additional clues about Abel's investment priorities. With Berkshire shares still lagging the S&P 500 for the year despite recent gains, how the market ultimately rewards Abel's more active approach to deploying Buffett's cash hoard will be a key storyline in market news through the remainder of the year.
