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Berkshire Hathaway Inc. (BRK.A) Stock Analysis
Our verdict on Berkshire Hathaway Inc. isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The acquisition closed on January 2, 2026, after the previously expected fourth-quarter 2025 timing. The transaction was completed, although later than the stated timeline. (2 met, 1 not yet due across 3 tracked commitments)
“On February 15, 2026, PacifiCorp and Portland General Electric Company and an affiliate of Portland General Electric Company (together, the “PGE Entities”) entered into an Asset Purchase and Service Area Transfer Agreement to sell to the PGE Entities certain PacifiCorp assets and liabilities associated with PacifiCorp’s Washington operations for a base sales price of $1.9 billion in cash. The transaction is subject to various regulatory approvals and customary closing conditions and is expected to close in the first half of 2027.”
The earlier remainder-of-2025 forecast can be reconciled to the first-half 2026 year-to-date forecast: the current filing reports $8.6 billion forecast for the remainder of 2026, down from $12.4 billion in the prior forecast, implying approximately $3.8 billion was spent in the first half of 2026 against the $12.4 billion remainder-of-2026 forecast. This does not provide evidence of the 2025 remainder spend. The commitment is therefore not verifiable from this document and is omitted from tracking. (1 met, 1 not yet due across 2 tracked commitments)
“BHE and BNSF forecast capital expenditures of approximately $4.4 billion over the remainder of 2025.”
Lubrizol reported significant increases in raw-material, energy, and supply-chain costs that began in late Q1 and continued through Q2 2026. Selling prices increased to address those cost pressures, consistent with the stated expectation. (1 met, 1 in progress across 2 tracked commitments)
“The increases were primarily attributable to higher volumes and selling prices and favorable foreign currency translation effects, partially offset by unfavorable product mix. The increases in selling prices were necessitated by significant increases in raw materials, energy and supply chain costs that began in the latter part of the first quarter and continued through the second quarter of 2026, resulting in increased production costs.”
At September 30, 2025, BNSF and BHE had spent a combined $10.124 billion in capital expenditures during the first nine months of 2025. The filing forecasts approximately $4.4 billion of combined BNSF and BHE capital expenditures over the remainder of 2025. This is a current-period forecast update, not evidence that the earlier $8.8 billion remainder-of-year forecast was achieved; the commitment is still active through year-end. (1 in progress across 1 tracked commitment)
“In the first nine months of 2025, our consolidated capital expenditures for property, plant and equipment and equipment held for lease were $14.7 billion, which included capital expenditures by BNSF and BHE of $10.1 billion. ... BHE and BNSF forecast capital expenditures of approximately $4.4 billion over the remainder of 2025.”
The agreement commenced on April 1, 2026, and Berkshire reported $483 million of premiums written under it in the second quarter and first six months of 2026. The ten-year commitment remains active. (1 in progress across 1 tracked commitment)
“We recorded premiums written in the second quarter and first six months of $483 million from a new whole account reinsurance agreement with certain wholly-owned insurance subsidiaries of Tokio Marine Holdings, Inc. (“Tokio Marine”), which commenced on April 1, 2026. Under the agreement, NICO assumes on a quota-share basis a portion of the non-life premiums written and related losses and expenses of Tokio Marine on risks attaching over a ten-year term.”
See the full cited Management analysis of Berkshire Hathaway Inc.
How durable is the business?
Manufacturing revenue grew 1.3% year over year in the first nine months of 2025, while pre-tax earnings grew 4.0%; its pre-tax margin increased from about 15.8% to 16.2%. In Q3, revenue increased 1.9% and pre-tax earnings rose 14.3%, reflecting stronger earnings growth than sales. The current-quarter evidence points to an improving margin profile, though year-to-date growth was more modest. (5 expanding across 5 engines)
“Manufacturing $ 22,568 $ 19,969 ... Pre-tax earnings: Manufacturing $ 4,117 $ 3,247”
Berkshire reported $354.3B of cash, cash equivalents, and Treasury bills in its insurance and other businesses at September 30, 2025, versus $359.2B in the June 2026 baseline, a 1.4% increase over time. Shareholders' equity was $698.2B at September 30, 2025; the baseline's $747.9B is not directly identical in scope or date, so this document supports a factual earlier-state comparison but not a precise like-for-like change claim for equity. (2 expanding, 1 stable, 1 contracting)
“At June 30, 2026, our insurance and other businesses held investments in cash, cash equivalents and U.S. Treasury Bills (net of payables for unsettled purchases) of $359.2 billion.”
The filing continues to describe broad insurance and reinsurance operations across auto, commercial property and casualty, life, and health, serving customers and insurers worldwide. It reports approximately $176B of insurance float at September 30, 2025, but the later baseline reports $177.5B at June 30, 2026. That is a modest increase in the funding pool, not direct evidence that the competitive moat itself widened. (4 stable)
“Float was approximately $177.5 billion at June 30, 2026, an increase of approximately $1.1 billion from December 31, 2025.”
The filing describes BHE's regulated utility and energy rates as subject to regulatory approval and generally based on operating costs, taxes, and a return on capital. No later baseline evidence indicates a change in this regulatory position, so the regulatory moat is treated as stable rather than newly strengthened or weakened. (1 stable)
“The rates BHE’s regulated utility and energy businesses charge customers for energy and services are largely based on the costs of business operations, including income taxes and a return on capital, and are subject to regulatory approval.”
Insurance premiums earned increased 1.5% year over year in the first nine months of 2025, while after-tax underwriting earnings increased 1.5%. Insurance investment income declined 1.5%. The latest quarter showed stronger underwriting earnings than Q3 2024, but lower investment income; combined insurance earnings remain a mix of the two trends. (3 expanding, 1 contracting across 2 engines)
“Revenues $ 6,601 $ 5,769 ... Earnings before income taxes $ 2,061 $ 1,809”
See the full cited Business Model analysis of Berkshire Hathaway Inc.
Where does growth come from?
Service-group revenue grew 9.2% in the first nine months of 2025, while Q3 service-group revenue rose 12.1% year over year. These overlapping reporting periods do not provide a clean sequential-quarter growth-rate comparison, but the latest quarter’s reported growth is stronger than the year-to-date rate. The service segment is a material opportunity: $16.9 billion in nine-month revenue, with aviation, data-center/life-sciences construction services, and electronics distribution among the cited contributors. (5 accelerating across 5 signals, 2 leading indicators)
“Car/unit volume increased 6.5% and 4.3%, respectively, in the second quarter and the first six months of 2026 relative to the same periods in 2025. ... Consumer products ... Volumes in the second quarter and the first six months of 2026 increased 9.3% and 5.3%, respectively, ... Agricultural and energy products ... volume increases of 11.5% in both the second quarter and first six months”
This ten-year agreement began April 1, 2026, and generated $483 million of premiums written in Q2 and in the first six months. It is a new source of business, with no comparable prior-year contract data; the broader property-and-casualty reinsurance premiums written were relatively unchanged for the first half. Classify the contract signal as new, not as a demonstrated accelerating trend. (1 new trend across 1 signal)
“We recorded premiums written in the second quarter and first six months of $483 million from a new whole account reinsurance agreement with certain wholly-owned insurance subsidiaries of Tokio Marine Holdings, Inc. (“Tokio Marine”), which commenced on April 1, 2026. Under the agreement, NICO assumes on a quota-share basis a portion of the non-life premiums written and related losses and expenses of Tokio Marine on risks attaching over a ten-year term.”
The March 2025 quarter filing predates the stated agreement start date of April 1, 2026 and reports no premiums from that contract. It does report Q1 2025 property/casualty reinsurance premiums written of $6.135 billion, down 5.0% year over year, reflecting lower property coverage volumes. The contract-specific signal is not yet present in this filing; the broader premium measure was declining. (3 reversing, 1 new trend across 4 signals)
“Premiums written in the first quarter of 2025 declined $320 million (5.0%) versus 2024, primarily attributable to lower volumes in property coverages.”
See the full cited Future Growth analysis of Berkshire Hathaway Inc.
What could break the thesis?
The earlier period had significant catastrophe losses: the Southern California wildfires caused about $1.1 billion of current-year claims in the first nine months of 2025. The baseline reports no significant catastrophe events in the first half of 2026. Recent catastrophe experience therefore eased, but exposure to future severe events remains; this is not a resolved risk. (3 easing, 1 insufficient_data, 1 high-severity)
“Our periodic operating results may be affected in future periods by the impacts of ongoing macroeconomic and geopolitical conflicts and events, including wars, developing international trade policies and tariffs, as well as changes in industry or company-specific factors or events. Considerable uncertainty remains as to the ultimate outcome of these events. We are currently unable to reliably predict the ultimate impact on our businesses, whether through changes in the availability of products, supply chain costs and efficiency, and customer demand for our products and services. It is reasonably possible there could be adverse consequences on our operating businesses, as well as on our investments in equity securities, which could significantly affect our earnings.”
Berkshire’s large utility and railroad investment program requires substantial ongoing spending. Higher debt costs or projects that do not earn approved returns could weaken these businesses’ cash generation and financial flexibility. [BALANCE_SHEET]
“In the first six months of 2026, our diverse group of businesses generated net cash flows from operating activities of $21.7 billion. Our consolidated capital expenditures for property, plant and equipment and equipment held for lease were $10.6 billion in the first six months of 2026, of which $6.7 billion was attributable to BNSF and BHE. BNSF and BHE maintain very large investments in capital assets (property, plant and equipment) and regularly make significant capital expenditures in the normal course of business. BHE and BNSF forecast capital expenditures of approximately $8.6 billion over the remainder of 2026.”
In September 2025, the $250 million nationwide Burnett settlement was approved by the district court but appealed; $67 million had been paid into escrow. The later baseline reports $130 million in escrow and the appeal remains unresolved. Payments have progressed, but the key legal uncertainty persists, so the risk is stable overall. (3 stable, 1 insufficient_data)
“Our periodic operating results may be affected in future periods by the impacts of ongoing macroeconomic and geopolitical conflicts and events, including wars, developing international trade policies and tariffs, as well as changes in industry or company-specific factors or events. Considerable uncertainty remains as to the ultimate outcome of these events. We are currently unable to reliably predict the ultimate impact on our businesses, whether through changes in the availability of products, supply chain costs and efficiency, and customer demand for our products and services.”
Equity securities were valued at $288.034 billion at March 31, 2026, and the five largest holdings made up 61% of the portfolio, down from 65% at December 31, 2025. The first-quarter report recorded $3.291 billion of unrealized losses on securities held at quarter-end, while the June baseline reports $323.779 billion of equity securities and 66% concentration in the five largest holdings, along with first-half unrealized gains. Concentration increased between March and June, so the portfolio's exposure to a small group of holdings intensified despite the differing market-return direction. (2 intensifying, 1 stable, 2 insufficient_data)
“Our significant business risks are described in Item 1A to Form 10-K for the year ended December 31, 2025, to which reference is made herein.”
Management explicitly reported greater uncertainty around trade policies and tariffs during the first nine months of 2025 and said effects on product availability, supply-chain costs, efficiency, and demand could be adverse. The June 2026 baseline continues to identify these exposures without a comparable measure of worsening or improvement, so the risk is treated as stable. (1 stable, 1 insufficient_data)
“These events, including tensions from developing international trade policies and tariffs, accelerated through the first nine months of 2025. Considerable uncertainty remains as to the ultimate outcome of these events. We are currently unable to reliably predict the ultimate impact on our businesses, whether through changes in the availability of products, supply chain costs and efficiency, and customer demand...”
See the full cited Risk analysis of Berkshire Hathaway Inc.
Read the full thesis on Berkshire Hathaway Inc.
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