Berkshire Hathaway joins $1T club, first for non-tech US firm
What's the story
Berkshire Hathaway, the conglomerate led by Warren Buffett, has achieved a market valuation of over $1 trillion.
This milestone is seen as a testament to investor confidence in the company that Buffett has built over nearly six decades.
The achievement also positions Berkshire Hathaway as an indicator of the American economy's health.
Berkshire joined six other US companies, all in or connected to technology sector, with market values above $1 trillion: Apple, NVIDIA, Microsoft, Google parent Alphabet, Amazon, and Meta.
Stock surge
Stock performance and company growth
On the day of this historic achievement, Berkshire Hathaway's Class A shares closed up 0.7% at $696,502.02, while the more widely held Class B shares rose 0.9% to $464.59.
The company has been under Buffett's leadership since 1965 when he transformed it from a struggling textile firm into a powerhouse with diverse businesses such as Geico car insurance, BNSF railroad, and Dairy Queen ice cream among others.
Financial growth
Financial achievements and investment strategy
In the first half of this year, Berkshire Hathaway's operating businesses generated a profit of $22.8 billion, marking a 26% increase from 2023.
Despite selling significant amounts of Apple and Bank of America stocks in 2024, the company still maintains a substantial stock portfolio.
These sales have significantly contributed to Berkshire's cash reserves which primarily consist of US Treasury bills and stood at $276.9 billion as of June 30.
Investment outlook
Journey to $1 trillion market value
The $1 trillion valuation is based on Berkshire's 553,234 Class A and 1,325,192,508 Class B shares outstanding as of July 23.
Since Buffett took over in 1965, Berkshire shares have seen an increase of more than 5.6 million percent.
This translates to an annual gain of about 20%, nearly double the annualized gain in the Standard & Poor's 500 including dividends.
Philanthropic efforts
Berkshire Hathaway's output and Buffett's philanthropy
Berkshire Hathaway's Class A shares have risen 28% this year, outperforming the S&P 500 excluding dividends which is up 17%.
Despite donating more than half his shares to charity since 2006, Buffett still retains ownership of over 14% of Berkshire.
His net worth of $146 billion places him as the world's sixth-richest person according to Forbes magazine.