Berkshire Hathaway Poised to Outperform in 2025

Berkshire Hathaway's stock is projected for growth as the S&P 500 enjoys a strong year. With a strategic shift away from Apple and a diverse equities portfolio, Berkshire aims to outperform the market in 2025.

Date: 01-01-2025

AI Rating: 7

Earnings and Revenue Performance
Berkshire Hathaway has performed very well over the last two years, trailing the overall market. However, it has still managed significant gains alongside the S&P 500 Index, which appreciated roughly 24% as of December 30, 2024.

Stock Portfolio Composition
Berkshire's portfolio holds a diversified set of equities with a shift from heavy exposure to Apple, which accounted for 30% to 40% of its portfolio at one point. This shift in strategy, where Berkshire has reduced its Apple holdings by 67%, has allowed it to balance its portfolio. Currently, Bank of America and American Express also represent a significant portion of its holdings alongside stocks in various sectors including oil and consumer goods.

Strong Cash Position
Berkshire reports a substantial cash position exceeding $300 billion, which provides it with flexibility to capitalize on potential market opportunities and hedge against inflation, especially with respect to its significant investments in energy assets. This strong cash position, along with its value-oriented portfolio, positions it well for favorable returns if oil prices rise again.

Market Vulnerability and Outlook
The overall market, while strong recently, is seen as potentially vulnerable due to elevated valuations and a concentration in a few high-performing stocks. However, Berkshire's management has a track record of navigating through recessions and might leverage its diverse holdings to maintain or even enhance its position moving forward.

Berkshire Hathaway's cautious shift away from high-growth stocks in favor of a diversified strategy that includes stable value stocks may prove beneficial as the market evolves.

Stocks: NYSE:BRK.A NYSE:BRK.B NYSE:AAPL NYSE:AMZN NYSE:AMC NYSE:C NYSE:AXP NYSE:BAC NYSE:CVX NYSE:OXY