After Three Years of Continuous Stock Sell-Off, Buffett Finally Takes Action

Original Title: "After Three Years of Continuous Stock Sell-Off, Buffett Finally Takes Action"
Original Author: Azuma, Odaily Planet Daily

On August 9, Beijing time, after the U.S. stock market closed, Berkshire Hathaway released its Q2 2026 financial report.

The financial report shows that Berkshire's total revenue in Q2 2026 reached $101.808 billion, a year-on-year increase of about 10%. The net profit attributable to shareholders was $25.667 billion, doubling compared to the same period last year (an increase of about 107%), with both operating profit and net profit significantly exceeding market expectations.

However, the more significant signal in the financial report is that Berkshire Hathaway has finally ended its continuous net stock sell-off that lasted for over three years (14 quarters) and has shifted to net buying.

With $400 Billion in Cash, Berkshire Finally Takes Action

The financial report indicates that in the second quarter, Berkshire Hathaway bought approximately $23.47 billion in stocks and sold only $3.69 billion, resulting in a net purchase of nearly $19.8 billion, ending a long-term net selling state since 2023.

What investors should pay attention to is where the funds are going. The financial report disclosed that Berkshire Hathaway's largest investment last quarter was an additional investment of about $10 billion in Alphabet (Google's parent company) through a private placement. This also made Google officially rank among the top five holdings of Berkshire Hathaway, alongside American Express, Apple, Bank of America, and Coca-Cola. As of the end of June, these five holdings accounted for 66% of the stock investment portfolio, indicating a still very high concentration.

Although Buffett has long held a cautious attitude towards tech stocks, he previously revealed that his investment in Google was a decision made in consultation with Greg Abel (the current CEO of Berkshire Hathaway, who officially took over from Buffett on January 1 of this year). Buffett also admitted that missing out on Google in its early years was a "historic mistake," and this recent investment is based on value investment logic, focusing on its monopoly in search and stable cash flow.

This $10 billion increase in holdings is an investment decision made under the leadership of the new CEO Abel—this may indicate that under the new structure where Buffett steps back and Abel takes charge, Berkshire Hathaway's tolerance and participation in cutting-edge technology are increasing.

In addition to resuming net buying in the market, Berkshire Hathaway also conducted its first stock buyback in two years in the second quarter. The financial report disclosed that last quarter, Berkshire Hathaway spent approximately $4.527 billion on buybacks, setting a new quarterly high since 2021; in July, it added over $3.3 billion for further buybacks.

In March of this year, Berkshire Hathaway officially announced the restart of its stock buyback program, with Abel stating at the time that the buyback was because management believed the "intrinsic value" of its own stock was higher than its market price.

With the shift in investment and buyback pace, Berkshire Hathaway's long-accumulated cash reserves are also beginning to change. One of the company's biggest labels in recent years has been "cash machine." Due to the lack of large opportunities that meet Buffett's investment standards, the company's cash and short-term U.S. Treasury holdings continued to rise, reaching nearly $400 billion at the end of the first quarter this year.

However, with stock increases, stock buybacks, and industrial mergers and acquisitions (mainly for acquiring the petrochemical company OxyChem and residential developer Taylor Morrison) taking place one after another, Berkshire Hathaway's cash reserves have begun to enter a downward trend. As of June 30, Berkshire held approximately $35.1 billion in cash and cash equivalents, with short-term U.S. Treasury holdings of about $324.9 billion, totaling approximately $36.47 billion, a significant decrease from $39.738 billion at the end of the first quarter.

Once Ridiculed for "Not Keeping Up with the Times," Actually Observing Quietly on the "Shore of the Rapid Current of the Times"

Let’s rewind to the period from 2023 to early 2026.

In recent years, the technological wave of AI has completely ignited the global capital market, with the chip and semiconductor industry chain represented by Nvidia, SK Hynix, Samsung, and Micron becoming the most crowded trading track.

The market was filled with the frenzy of "All in AI," and any fund manager without heavy semiconductor holdings was seen as outdated, while Buffett and his Berkshire Hathaway, despite having thousands of billions of dollars in cash on their books, chose to observe almost indifferently.

Mockery followed. "Buffett can't keep up with the times," "value investing is dead," "the moat theory is outdated in the face of the AI revolution," "the old man is worse than me"... similar doubts were endless. People were eager to compare the several-fold or even ten-fold increases in semiconductor stocks with Berkshire Hathaway's seemingly sluggish stock price performance, hastily concluding that this 90-year-old old-school investment master and his designated successor Abel had lost their judgment on the technological revolution.

However, Berkshire Hathaway's choices clearly have their own logic. In the Q2 2026 financial report, Berkshire Hathaway reiterated its iconic warning: "The amount of investment gains or losses in any specific quarter is usually meaningless and has almost no analytical or predictive value."

This statement seems to target GAAP accounting standards, but in fact reflects a consistent attitude towards short-term market speculation. In Buffett and Abel's eyes, they may still have doubts about whether the semiconductor industry can escape its cyclical nature, and there is uncertainty about when the explosive demand for AI hardware will translate into sustainable cash flow.

As the market entered a euphoric phase, with semiconductor companies' stock prices soaring, the market environment at that time was completely inconsistent with Berkshire Hathaway's discipline of "buying great companies at reasonable prices." Thus, when the market was immersed in FOMO sentiment, Berkshire Hathaway chose the most tedious but also most aligned with its DNA strategy—waiting.

Only in recent months, as the semiconductor frenzy suddenly receded, have the previously overhyped targets encountered significant corrections. Those who once mocked Buffett for "missing out" suddenly found that the paper profits from chasing high semiconductor stocks evaporated rapidly during the correction, while the thousands of billions of dollars in cash on Berkshire Hathaway's books not only provided it with unparalleled safety margins but also gave it the confidence to be greedy when others were fearful.

The $19.8 billion net purchase in the second quarter is a validation of this discipline. It is worth noting that Berkshire Hathaway did not chase the market at its peak but made large-scale purchases only after experiencing market fluctuations and when the prices of quality assets returned to reasonable ranges.

This is precisely the truth that Buffett has practiced over decades—investing is not about who runs faster, but about who lives longer and laughs last.

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