Berkshire Hathaway Reports 34% Surge in Quarterly Earnings Amid Record $381.6 Billion Cash Hoard

• Why Did Berkshire’s Profits Jump 34% Despite Stock Underperformance?
• Buffett’s Retirement Bombshell: Why Did Shares Drop 11.5%?
• Is Greg Abel Ready to Fill Buffett’s Shoes?
• OxyChem Deal: Berkshire’s Biggest Bet Since Alleghany
• FAQ: Your Top Berkshire Questions Answered

Berkshire Hathaway’s Q3 2025 earnings skyrocketed by 34%, fueled by a 200% jump in insurance subscription revenue. Yet, Warren Buffett’s reluctance to deploy its $381.6 billion cash pile—now larger than some nations’ GDP—has left investors puzzled. With Buffett stepping down as CEO in late 2025 and Greg Abel taking the reins, Berkshire’s stock underperformance (-11.5% post-announcement) and Wall Street’s downgrades signal mounting skepticism. Meanwhile, the $9.7 billion OxyChem deal marks its biggest MOVE since 2022. Here’s the full breakdown.

Why Did Berkshire’s Profits Jump 34% Despite Stock Underperformance?

Berkshire’s Q3 operating profits hit $13.5 billion, with total earnings (including stock holdings) rising 17% to $30.8 billion. The star performer? Insurance subscriptions, which soared 200% to $2.37 billion. But here’s the twist: While Class A/B shares gained 5% YTD, they lagged the S&P 500’s 16.3% rally. Analysts like Keefe, Bruyette & Woods’ Meyer Shields blame Buffett’s exit plans and “insufficient transparency” for the gap. Even a $10.4 billion Q3 stock sale—instead of buybacks—hints Buffett sees few bargains. “He’s sitting on a mountain of cash but won’t spend,” notes one trader. “That’s classic Buffett, but it’s frustrating bulls.”

Buffett’s Retirement Bombshell: Why Did Shares Drop 11.5%?

On May 2, 2025, Berkshire’s Class B shares hit a record high NEAR $540—outpacing the S&P by 22.4%. Then, Buffett dropped the mic: He’ll step down as CEO by year-end, handing the role to VP Greg Abel. Cue a 11.5% plunge. Though shares rebounded slightly, they’re still 10.9% behind the S&P as of October. KBW downgraded Class A shares to “underperform,” slashing their target to $700,000 (from $740,000). “The ‘Buffett premium’ is vanishing,” warns Shields. But not everyone’s panicking. Semper Augustus’ Chris Bloomstran calls Berkshire “still overvalued,” while Northstar’s Henry Asher insists Abel doesn’t need to “be Buffett” to keep profits flowing.

Is Greg Abel Ready to Fill Buffett’s Shoes?

Abel, 62, will take over daily operations and write Berkshire’s shareholder letters starting 2026. Investors fret over his lack of a public track record in stock-picking—a Buffett hallmark. Yet insiders praise his operational chops. “Everyone I know at Berkshire raves about Greg,” Bloomstran told the Wall Street Journal. Abel’s challenge? Maintaining trust without Buffett’s cult-like following. Case in point: GEICO’s margins may have peaked, and rail tariffs loom. Still, Asher argues, “You won’t cancel your Burlington Northern shipment just because Buffett’s gone.”

OxyChem Deal: Berkshire’s Biggest Bet Since Alleghany

In October, Berkshire agreed to buy OxyChem for $9.7 billion cash—its largest acquisition since the $11.6 billion Alleghany purchase in 2022. The move signals Abel’s likely focus: steady industrial cash cows over flashy tech bets. Yet it barely dents Berkshire’s war chest. With rates low and stocks shaky, Buffett’s cash hoard keeps growing. “They’re playing the long game,” says a BTCC analyst. “But Wall Street wants action now.”

FAQ: Your Top Berkshire Questions Answered

Why isn’t Berkshire buying back shares?

Buffett famously waits for “fat pitches.” With valuations high, he’s held off—even as shares dipped. Some call it prudence; others, missed opportunities.

Will Abel change Berkshire’s strategy?

Unlikely. Abel’s background suggests he’ll stick to Buffett’s playbook: cash-generating businesses, minimal debt, and patience.

Is Berkshire’s cash pile a red flag?

Not necessarily. It offers firepower for crises or bargains—but critics say it drags on returns.