Berkshire Hathaway Shares Plummet 14% Since May 2025 as S&P 500 Soars 11% – What’s Behind the Historic Underperformance?

• The Great Berkshire Exodus: A 25-Point Performance Gap Emerges
• Why Are Investors Fleeing Buffett’s Empire?
• The Silent Selloff: Who’s Dumping Berkshire Shares?
• Strong Fundamentals, Weak Demand: The Berkshire Paradox
• Buffett’s Defensive Posture: $344 Billion Cash Pile and No Buybacks
• History Repeats? Comparing 2025 to the Dot-Com Era
• Value vs. Growth: A Clash of Investment Philosophies
• What Comes Next for Berkshire Hathaway?
• FAQs: Berkshire Hathaway’s 2025 Slump

Warren Buffett’s Berkshire Hathaway is experiencing its worst market lag in decades, with Class A shares dropping 14% since May 2, 2025 – the day Greg Abel was announced as Buffett’s successor. Meanwhile, the S&P 500 has gained 11%, creating a staggering 25-percentage-point performance gap. This divergence highlights a dramatic shift in investor sentiment as Berkshire’s value-oriented approach clashes with a tech-driven market rally. The selloff coincides with Buffett’s gradual retirement and raises questions about Berkshire’s future without its legendary leader at the helm.

The Great Berkshire Exodus: A 25-Point Performance Gap Emerges

Since May 2, 2025, when Warren Buffett confirmed Greg Abel WOULD succeed him as CEO, Berkshire Hathaway’s Class A shares have nosedived 14% while the S&P 500 (including dividends) climbed 11%. This 25-point underperformance marks Berkshire’s worst relative showing in over thirty years, according to TradingView data. The last comparable slump occurred during the 2020 pandemic crash when financial stocks – still a cornerstone of Berkshire’s portfolio – took a severe beating.

Why Are Investors Fleeing Buffett’s Empire?

The selloff appears driven by three key factors: leadership transition jitters, a market rotation from value to growth stocks, and Berkshire’s own conservative positioning. "What’s really moving this market is technology, and we know that’s not really Buffett’s thing," noted Bill Stone of Glenview Trust. Ironically, Berkshire had gained 18.9% in early 2025 as investors sought safety during trade war fears, only to reverse course when tech stocks regained favor.

The Silent Selloff: Who’s Dumping Berkshire Shares?

Berkshire’s original Class A shares, which traded at a record $812,855 in May 2025, have seen particularly heavy selling. These shares are typically held by multi-generational investors who bought in decades ago. While the exact sellers remain unknown, upcoming institutional filings later this month may reveal the sources. The BTCC team observes that such concentrated selling from long-term holders often signals deeper concerns about future prospects.

Strong Fundamentals, Weak Demand: The Berkshire Paradox

Oddly enough, Berkshire’s operations remain robust. Q2 2025 saw profit growth across BNSF railroad, utilities, manufacturing, and retail segments, with operating earnings up 8% year-over-year (excluding currency effects). Yet buyers remain scarce. This disconnect suggests the market is pricing in more than just current performance – it’s betting on a post-Buffett era where Berkshire’s competitive advantages may diminish.

Buffett’s Defensive Posture: $344 Billion Cash Pile and No Buybacks

The Oracle of Omaha has notably stopped Berkshire’s share repurchases as the price-to-book ratio hit 1.8x – its highest since October 2008. "The stock was overvalued," remarked Christopher Bloomstran of Semper Augustus Investments. Instead of buying, Buffett has been selling, including reducing Berkshire’s Apple position and being a net seller of equities for 11 consecutive quarters. Cash now represents 30% of Berkshire’s assets, reflecting Buffett’s cautious stance.

History Repeats? Comparing 2025 to the Dot-Com Era

The current situation echoes 1999 when Buffett famously avoided tech stocks during the dot-com boom. Berkshire underperformed badly then too, only to emerge unscathed when the bubble burst. However, CFRA analyst Cathy Seifert warns the "Buffett premium" may not transfer to Abel: "The next few quarters will show whether that legacy can hold." This time, the challenge isn’t just missing a rally – it’s proving Berkshire can thrive without its iconic leader.

Value vs. Growth: A Clash of Investment Philosophies

The market’s current preference for growth over value stocks exacerbates Berkshire’s woes. While tech giants drive indices higher, Berkshire’s insurance-heavy, industrial-focused portfolio appears outdated to many investors. This philosophical divide raises fundamental questions about whether value investing – Buffett’s bread and butter – still works in today’s market environment.

What Comes Next for Berkshire Hathaway?

All eyes will be on Greg Abel’s early moves as CEO-designate and whether he can maintain Berkshire’s unique culture while adapting to new market realities. Key indicators to watch include: institutional ownership changes in upcoming filings, Abel’s capital allocation decisions, and whether Berkshire resumes share buybacks at these lower price levels. One thing’s certain – the transition marks the end of an era for American investing.

FAQs: Berkshire Hathaway’s 2025 Slump

How much has Berkshire Hathaway underperformed the S&P 500 recently?

Since May 2, 2025, Berkshire’s Class A shares have dropped 14% while the S&P 500 gained 11%, creating a 25-percentage-point performance gap – its worst in over three decades.

Why did Berkshire shares start falling in May 2025?

The decline began immediately after Warren Buffett announced Greg Abel as his successor, combined with a market rotation from value to growth stocks and Berkshire’s own high valuation at the time.

Is Berkshire Hathaway still profitable despite the stock decline?

Yes, Q2 2025 operating earnings ROSE 8% year-over-year across its railroad, utility, manufacturing and retail businesses, showing fundamental strength despite the share price weakness.

What percentage of Berkshire’s assets are in cash?

As of June 2025, cash and Treasury investments represent about 30% of Berkshire’s total assets – a historically high level reflecting Buffett’s defensive positioning.

When was the last time Berkshire trailed the market this badly?

The last comparable underperformance occurred during the 2020 pandemic crash, and before that during the 1999 dot-com boom when Buffett avoided tech stocks.