Berkshire Hathaway, the conglomerate led by billionaire Warren Buffett, has officially reached a market capitalization of $1 trillion, becoming the first U.S. company outside the technology sector to achieve this milestone. This remarkable achievement places Berkshire alongside tech giants such as Apple, Microsoft, and Amazon, which have long dominated the trillion-dollar valuation club.
The company’s Class A shares briefly surged to $696,005.94 on Wednesday, pushing its total market value past the $1 trillion mark. The milestone was met with widespread acclaim, as Berkshire Hathaway continues to be seen as a proxy for the overall U.S. economy, reflecting Buffett's successful investment strategy over nearly six decades.
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Berkshire Hathaway has evolved under Buffett's leadership since he took a controlling interest in 1965. Today, it operates a diversified portfolio of businesses, including insurance, energy, manufacturing, and retail, generating substantial profits. In the first half of 2024 alone, Berkshire reported profits of $22.8 billion, a 26% increase from the previous year
Berkshire's success is not just about its operating businesses; the company also has a massive stock portfolio. Notably, Apple has been a significant contributor to Berkshire's financial success, although the conglomerate has recently sold more than half of its Apple shares. Despite this, Berkshire's holdings in cash and equivalents soared to $276.9 billion as of June 30, driven by these stock sales.
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Buffett, who is set to turn 94 on August 30, continues to be at the helm of the company, overseeing its operations and investment decisions. His influence on Berkshire Hathaway is evident, with the company's shares having risen over 5,600,000% since he took over, achieving an annualized return of about 20%—nearly double that of the S&P 500.
Berkshire's Class A shares, among the most expensive in the world, have gained 27% this year alone, outperforming the S&P 500's 18% rise. Investors’ confidence in Berkshire remains robust, driven by Buffett's prudent management and the company's diversified holdings, which include well-known brands like Geico, Dairy Queen, and BNSF Railway.
This latest achievement highlights Berkshire Hathaway’s enduring strength in a market often dominated by tech companies. As Buffett himself noted earlier this year, Berkshire is expected to "do a bit better than the average American corporation" while operating with less risk of permanent capital loss—a philosophy that has clearly paid off.
With this landmark event, Warren Buffett's Berkshire Hathaway cements its place in the history of American business, showcasing the power of long-term, diversified investing.
