Berkshire’s Cash Reserves Increase While Shares Decline: Could the Incoming CEO Initiate a New Strategy?

Renowned investor Warren Buffett has now spent three straight years selling more stocks than buying at Berkshire Hathaway, highlighting a significant change in the conglomerate’s strategy as it prepares for a leadership transition. As of September 30, 2025, Berkshire’s cash holdings soared to an unprecedented $381.67 billion, according to

, reflecting a conservative stance on capital allocation. Despite this, the company’s shares have lagged behind the overall market, as pointed out. With the 95-year-old CEO stepping down at the end of the year and Greg Abel set to take over, the company faces a defining moment after six decades under Buffett’s leadership, reported.

Berkshire’s third-quarter earnings, announced on November 1, showed a 34% increase in operating profit from the previous year, reaching $13.49 billion—a result Seeking Alpha attributed to strong insurance underwriting. Profits from this segment jumped to $2.37 billion, thanks to fewer major losses and positive claim trends. Nevertheless, Berkshire continued to sell more stocks than it bought, with net sales of $6 billion in Q3, marking 12 straight quarters of net selling, as Morningstar also noted. Analysts say Buffett’s focus on liquidity reflects caution in volatile markets, though some critics, according to Morningstar , believe it signals a shortage of appealing investments.

Berkshire has not repurchased any shares for five consecutive quarters, intensifying debate over its approach to capital management. Historically, Buffett has preferred investing in high-quality businesses, but the current cash reserve—now $381 billion, up from $344 billion in the previous quarter, as Morningstar observed—suggests a more cautious, wait-and-see attitude. This has drawn attention as Berkshire’s stock has only risen 5% this year, compared to a 17% gain for the S&P 500, a gap MarketWatch highlighted. Edward Jones analyst James Shanahan remarked that Buffett’s core belief remains: “We will never prefer ownership of cash-equivalent assets over the ownership of good businesses,” even as cash accumulates, Morningstar added.

The upcoming leadership change is a major factor. Abel, the incoming CEO, has indicated he will maintain Berkshire’s current operating model but could face calls to diversify how capital is used. The company has already agreed to spend $9.7 billion to buy Occidental Petroleum’s OxyChem unit, according to Financial Modeling Prep—a deal Buffett called a template for investing in expensive markets, as Seeking Alpha reported. With Abel set to write Berkshire’s annual letter for the first time in 2026, Seeking Alpha noted that investors will be watching for any strategic shifts. “Greg doesn’t know anything about this that I’m telling you right now,” Buffett joked during his May announcement, as USA Today recounted, hinting at the uncertainty ahead.

Berkshire’s financial strength remains remarkable. Its cash reserves now surpass the market value of most Fortune 500 firms, giving the company flexibility for options like dividends—which haven’t been paid since 1967—acquisitions, or buybacks. Still, with Abel’s active management style and Buffett’s ongoing role as chairman, the future direction is not yet clear. “The final word will be what Greg said,” Buffett stressed, according to USA Today , though his continued presence may help ensure stability.

As Berkshire moves through this period of change, attention will turn to how Abel manages the balance between honoring Buffett’s legacy and pursuing new opportunities. For now, the record cash levels and continued net stock sales point to a company choosing patience over immediate action—a strategy that has benefited Berkshire in the past but could challenge investor faith as the “Buffett premium” diminishes, MarketWatch warned.