Berkshire Hathaway’s operating earnings climbed 16% in the second quarter, reaching $12.98 billion from $11.16 billion a year earlier, as CEO Greg Abel began deploying Warren Buffett’s record cash hoard on buybacks, acquisitions, and stock purchases.
The earnings strength came from gains across Berkshire’s industrial and retail operations, with manufacturing and service earnings jumping 24% to $4.47 billion and railroad profit rising 6% to $1.56 billion. Insurance underwriting, however, weakened, falling 13% to $1.73 billion, according to CNBC.
More significant than the earnings growth was Abel’s acceleration in deploying capital. Berkshire repurchased $4.5 billion of its own shares during the quarter, a sharp jump from just $235 million in the first three months of 2026, according to CNBC. The conglomerate also reversed a striking 14-quarter pattern of selling stocks, becoming a net buyer of equities with nearly $20 billion in net purchases in the second quarter.
The cash pile that Buffett accumulated over decades of cautious investing declined to $365.5 billion at the end of June from a record $397.4 billion three months earlier. That decline reflected capital deployment through buybacks, other investments, and the closing of the Taylor Morrison homebuilder acquisition for approximately $6.8 billion, which marked Abel’s first major deal as CEO.
Among Berkshire’s new positions is a $10 billion investment in Alphabet, Google’s parent company, which Buffett told CNBC he initiated after consulting with Abel. That investment elevated Alphabet to one of Berkshire’s five largest equity holdings by market value, alongside longtime holdings American Express, Apple, Bank of America, and Coca-Cola.
The shift in capital deployment signals Abel’s willingness to move faster than his predecessor. Buffett had held the record cash hoard partly out of concern about equity valuations, telling investors in May 2026 that he was having difficulty finding values in the market. Shareholders had been pressing Abel to put some of that cash to work beyond Treasuries, and the Q2 results show he is responding to that pressure.
Sources
- CNBC — Berkshire’s operating earnings rose 16% to $12.98 billion; cash hoard deployment; buyback acceleration; net equity purchases; Alphabet investment details
- Wall Street Journal — Quarterly profit more than doubled; cash pile decline; Taylor Morrison acquisition; net buyer status
- Barron’s — Operating earnings increase to $13 billion; manufacturing gains; railroad profit rise
- RTTNews — Operating earnings of $12.983 billion vs. prior year’s $11.160 billion; investment gains
