Berkshire Hathaway shares reached new record highs during the week, although the rally lost momentum as the month drew to a close, with the conglomerate gaining 8.9% in October while major US stock indexes came under pressure from a selloff in technology and artificial intelligence shares.
According to CNBC, the company’s Class A shares closed Monday at a record $821,931 before ending the week at $815,600, up just 0.3%. The stock briefly climbed to nearly $822,929 at Friday’s open but failed to surpass its intraday record of $824,765 set the previous Thursday.
Class B shares, which are more widely held by individual investors, also established a record closing price of $548.56 on Monday. Their Friday intraday high of $550.47 exceeded the previous record of $549.96, although the shares gained less than 0.1% over the week.
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The new highs complete Berkshire’s recovery from a roughly 15% decline that followed Warren Buffett’s announcement last year that he would step down as chief executive. The recovery has also helped the company outperform the broader market during a period when investors have become more cautious about expensive technology stocks and the financial returns from heavy AI investment.
Berkshire gained 8.9% in October, compared with a 0.9% decline in the S&P 500 and a 5.3% fall in the Nasdaq Composite. The Nasdaq dropped 2.9% on Friday, its steepest single-day decline since June, as investors reassessed the spending commitments of major technology companies.
The rotation towards established businesses with diversified earnings and substantial operating cash flows has supported Berkshire’s shares. Its insurance, energy, railway, manufacturing and consumer businesses provide exposure to a broad range of economic activities, making the company an alternative for investors seeking to reduce dependence on technology-led market gains.
However, Berkshire’s performance remains mixed over a longer period. Its Class B shares narrowed their year-to-date underperformance against the S&P 500 from 3.5 percentage points the previous week to 2.8 percentage points. Over the past 12 calendar months, they have outperformed the benchmark by more than two percentage points.
Alphabet Selloff Reduces Value of Berkshire’s Major Technology Investment
While Berkshire has benefited from the market’s shift away from high-growth technology stocks, the decline has also affected one of its largest equity investments.
Alphabet, Google’s parent company, lost approximately $500 billion in market value on Thursday after its shares plunged nearly 13%, marking their worst trading day since the company went public in 2004.
The decline followed Alphabet’s third-quarter earnings report, which showed negative free cash flow of $9.1 billion, more than three times analysts’ expectations of $2.7 billion. The result heightened concerns about the cost of expanding AI infrastructure, including the computing capacity needed to develop and operate increasingly sophisticated models.
Revenue from web search also missed analysts’ estimates for a second consecutive quarter. The combination of rising infrastructure expenditure and weaker-than-expected search performance has intensified questions about AI investment’s chance to pressure Alphabet’s established advertising business while requiring substantial additional capital.
Berkshire’s Alphabet position has been particularly affected. Buffett initiated the investment last year, and the company expanded its exposure through a $10 billion private placement in the second quarter of this year.
The holding reached approximately $40 billion in early August before losing about a quarter of its value. By Friday, it was worth an estimated $29.6 billion, based on the number of shares Berkshire held as of June 30.
That makes Alphabet Berkshire’s fourth-largest publicly traded equity investment on the available shareholding figures. The ranking could change when Berkshire releases its September 30 portfolio disclosure in two weeks, as transactions during the third quarter may have altered its holdings.
Coca-Cola has moved into third place, with Berkshire’s position rising from approximately $32.5 billion in late July to $37.6 billion, an increase of nearly 16%.
The decline in Alphabet also raises questions about the timing and pricing of Berkshire’s investment. Barron’s estimates that Berkshire may have paid more than $300 per share, possibly close to $320, leaving the position below its estimated acquisition cost at current prices.
The investment illustrates the exposure Berkshire retains to the AI spending cycle through its public equity portfolio, even as its broader business structure has helped attract investors seeking alternatives to technology stocks. Alphabet’s long-term earnings potential remains tied to its ability to defend search advertising while financing AI development without allowing infrastructure costs to overwhelm cash generation.
DaVita Share Sale Follows Existing Ownership Agreement
Separately, Berkshire disclosed in a filing with the US Securities and Exchange Commission that it sold $69 million worth of DaVita shares on Tuesday.
The conglomerate retained approximately 28.3 million shares in the dialysis services provider, valued at about $5.3 billion.
The sale does not necessarily indicate a change in Berkshire’s investment outlook. It forms part of an arrangement agreed with DaVita in 2024 under which Berkshire committed to keeping its ownership stake at or below 45%.
DaVita has been repurchasing its own shares, reducing the number of shares outstanding. As a result, Berkshire must periodically sell part of its holding to prevent its ownership percentage from exceeding the agreed limit.
The latest transaction follows earlier reductions under the same arrangement. It is therefore different from a discretionary decision to exit or substantially reduce an investment because of deteriorating business prospects.
DaVita shares have gained approximately 65% this year, although the stock fell more than 23% in a single week in August after the company reported disappointing earnings. That decline occurred only days before Berkshire’s previous share reduction under the agreement.
The distinction matters when assessing Berkshire’s portfolio activity. Its DaVita sales are driven by an ownership constraint, while the decline in Alphabet’s valuation is the result of market reassessment of the company’s earnings and AI investment requirements.
Berkshire’s latest performance consequently presents two contrasting developments. Its diversified operating businesses and perceived defensive qualities have helped its shares advance as technology stocks weaken, but its substantial Alphabet investment remains exposed to the same concerns about AI infrastructure costs and monetization that are weighing on the wider market.