Did Greg Abel Just End Berkshire Hathaway’s (BRK-B) Cash-Hoard Problem?

Berkshire Hathaway Inc. (NYSE:BRK-B) shares saw a 1.5% increase on August 10, climbing to a three-year high after Warren Buffett announced his resignation as CEO. The company's non-GAAP earnings rose 16% to $12.98 billion for the quarter. Greg Abel, who succeeded Buffett as CEO in early 2026, quickly began deploying Berkshire's vast liquidity.

During Q2, Berkshire purchased $23.5 billion of publicly traded stocks and repurchased $4.5 billion of its own shares. In July, another $10.1 billion was used for additional buybacks and the acquisition of Taylor Morrison Home Corporation. This marks the beginning of a more active capital-allocation era, but it's unclear if it's a permanent shift or just a busy period.

The most significant figure in Berkshire's report was the nearly $20 billion difference between stocks bought and sold. In Q2, Berkshire bought $23.5 billion of equities while selling around $3.7 billion, ending 14 consecutive quarters as a net seller of stocks. This shift in capital allocation was noticeable, but it didn't signal Berkshire's departure from Buffett's playbook.

Berkshire's $10 billion investment in Alphabet Inc. (NASDAQ:GOOGL) demonstrated its ongoing commitment to large public-market commitments. This strategic move also aligns better with Alphabet's business profile than its technology label might suggest. The company's decision to repurchase $4.5 billion of its own stock highlighted its confidence in undervaluing its shares, as determined by Buffett's valuation standards.

The acquisition of Taylor Morrison Home Corporation added another layer to Berkshire's capital deployment strategy. Control over the homebuilder provides Berkshire with access to complementary businesses and allows for more strategic reinvestment of capital. This move reflects Berkshire's continued focus on expanding its industries of expertise rather than simply pursuing large, unfamiliar investments.