In 2025, Berkshire Hathaway’s Class B shares advanced 11.5% under Warren Buffett’s leadership, falling short of the broader market’s 16.6% gain. This marked the first underperformance in his final year after decades of beating the S&P 500. The SPDR S&P 500 ETF Trust reached multiple record highs during the Christmas week, underscoring the gap between Berkshire’s return and the benchmark in Buffett’s swan song as CEO.

Over the past quarter-century, Berkshire Hathaway outperformed the S&P 500 in 13 of 25 calendar years, while the index prevailed in 12. The conglomerate’s average annualized return over that period stands at 11.1%, slightly ahead of the S&P 500’s 10.3%. Notable years include 2013, when the S&P surged 32.3% versus Berkshire’s 32.2%, and 2008, when Berkshire’s 32.1% decline outpaced the index’s 36.8% drop. These long-term results illustrate the narrow but meaningful edge Buffett cultivated.

On January 1, Greg Abel succeeded Warren Buffett as CEO, inheriting a conglomerate with more than 90 operating businesses spanning insurance, railroads, energy and consumer goods. Investors will scrutinize Abel’s allocation decisions, especially following the 2025 acquisitions of stakes in UnitedHealth Group and Alphabet. The market will be watching whether he maintains these positions, scales them back or pursues new deals to propel earnings growth beyond the cash-heavy legacy.

As Buffett steps aside, Berkshire holds a record $382 billion in cash and short-term U.S. Treasury bills, representing over 30% of assets under management. The cash hoard reflects 12 consecutive quarters of net portfolio sales and a preference for risk-free yields around 3.6% to 4%. This liquidity war chest provides Abel with flexibility for large acquisitions or opportunistic buybacks but also signals management’s view that few equities offer attractive entry points at current valuations.