On Wednesday, Warren Buffett’s Berkshire Hathaway achieved an important landmark. The firm’s market capitalization exceeded $1 trillion, joining an exclusive group of only seven companies with values beyond $1 trillion.
Most of the other companies in this trillion-dollar ranks hail from the technology industry. These include Apple, Nvidia, Microsoft, Google’s parent company Alphabet, Amazon.com, and Meta Platforms, the parent company of Facebook. In contrast, Berkshire Hathaway operates as a multifaceted conglomerate.
Its diverse portfolio encompasses sectors such as insurance, energy, manufacturing, retail, and various services. Noteworthy subsidiaries under the Berkshire umbrella include the car insurance provider Geico, BNSF Railway, Berkshire Hathaway Energy, Brooks athletic footwear, Dairy Queen, Ginsu knives, and the World Book encyclopedia. In the first half of the year, Berkshire’s business activities yielded a profit of $22.8 billion.
This figure represents a 26% rise compared to the previous year. Additionally, the company boasts a substantial stock portfolio, prominently featuring Apple. However, it has disposed of more than half of its Apple holdings this year.
Berkshire achieves $1 trillion milestone
These share transactions contributed to an increase in Berkshire’s cash and cash equivalents, which surged to $276.9 billion as of June 30, predominantly held in U.S. Treasury bills.
Warren Buffett, who will celebrate his 94th birthday on August 30, has been at the helm of Berkshire since 1965. Under his guidance, the company’s stock has appreciated by over 5,600,000%. This corresponds to an annual growth rate of around 20%, nearly double the annualized return of the S&P 500, including dividends.
Since 2006, Buffett has contributed over half of his Berkshire shares to philanthropic causes, yet he continues to hold more than 14% of the company based in Omaha, Nebraska. As of Tuesday, Forbes estimated his net worth to be around $144.9 billion.
This positions him as the sixth-richest individual globally. To date, Berkshire shares have climbed by 27% this year, while the S&P 500 has risen by 18%.
Reaching a valuation of $1 trillion signifies a tremendous accomplishment for Berkshire Hathaway, showcasing the trust investors place in the enterprise that Buffett has nurtured for nearly sixty years.
