“Berkshire Hathaway Stock Nears Historic $1 Trillion Market Cap Amid Market Turmoil”

Berkshire Hathaway Stock Nears $1 Trillion Market Cap

Berkshire Hathaway’s stock is defying the broader market trend, with shares inching closer to a historic $1 trillion market capitalization. The company’s Class A stock rose 1.1% to $667,601, nearing a record high of nearly $670,000. Meanwhile, the Class B stock was up 1.2% at $444.28, outperforming the S&P 500 index, which was down 1.4%.

With Berkshire’s market value currently at around $960 billion, analysts estimate that the Class A stock would need to reach approximately $696,000 to reach the coveted $1 trillion mark, just 4% above the current price. If the Class B shares were converted to an equivalent amount of Class A stock, there would be roughly 1.437 million shares outstanding.

Berkshire’s stock has been on a strong run this month, gaining about 9% as value stocks and financials have performed well. The company is a key component of both the Russell 1000 value index and the S&P 500 financial sector.

Year-to-date, Berkshire’s stock has outperformed the S&P 500 with a 23% gain compared to the index’s 18% total return. Over the past decade, Berkshire has also delivered a higher annualized return of 13.4% versus 13.1% for the S&P 500.

Currently valued at about 1.5 times its estimated book value of $435,000 per Class A share, Berkshire’s stock trades at around 23 times estimated 2024 earnings. However, when factoring in the profits of the companies in Berkshire’s $400 billion equity portfolio using a look-through approach, the price/earnings ratio drops to approximately 18 or 19.

Since Warren Buffett took control of Berkshire in 1965, the Class A stock has surged from around $20 without any stock splits along the way. Buffett’s 15% stake in the company is now valued at about $139 billion.

Analysts speculate that Berkshire could reach a $1 trillion market value by August, coinciding with Buffett’s 94th birthday after nearly 60 years at the helm of the company. Such an achievement would mark a significant milestone for Berkshire Hathaway and serve as a fitting birthday present for the legendary investor.

In conclusion, Berkshire Hathaway’s stock performance and potential milestone of reaching a $1 trillion market cap underscore the company’s enduring success under Warren Buffett’s leadership. As the stock continues to outperform the broader market, investors and analysts alike will be closely watching Berkshire’s trajectory in the coming months.

Written by Andrew Bary