Warren Buffett’s $29 Billion Bet: Should You Follow Berkshire Hathaway Into This Financial Stock NOW?

Buffett's billions are talking—loudly.

The Oracle of Omaha just parked a staggering $29 billion in a single financial stock through Berkshire Hathaway. That's not just pocket change—it's a conviction play that demands attention.

Why This Move Matters

When Buffett moves, markets listen. This isn't some speculative tech gamble—it's a calculated bet on stability and value. The same principles that built his empire now point toward this financial heavyweight.

The Crypto Angle

While traditional finance plays defense, crypto's eating their lunch. Decentralized finance doesn't need legacy approvals—it just bypasses the middlemen Buffett loves. Talk about ironic.

Bottom Line

Buffett's bet might be safe, but safe rarely means revolutionary. Meanwhile, digital assets are rewriting finance's rulebook—without asking for permission.

Image source: Getty Images.

Operating from a position of strength

The business in Berkshire's portfolio that investors might consider is(BAC -0.49%). With $3.4 trillion in total assets, it's the second-biggest bank in the U.S. based on this metric. Based on the company's second-quarter financial performance, investors have reasons to be confident.

During the quarter, net revenue increased by 4% year over year. There was 7% loan growth. Net interest income was up for the fourth straight quarter. In a sign of credit quality, the net charge-off rate improved compared to Q2 2024. And the bank remains a leader in deposit gathering, with top retail market share.

Bank of America is a dominant financial services entity. Besides the factors already mentioned, one obvious reason why is because of how diversified its operations are. It has its hands in consumer and small business banking, corporate and investment banking, capital markets, and wealth management. If any segment comes under weakness, it can be offset by better results elsewhere.

Investors should follow in Buffett's footsteps in the sense that they should try and identify businesses that have an economic moat, or durable competitive advantages that help them outperform rivals and new entrants. Bank of America fits the bill. Its massive scale gives it a cost advantage. And as is the case with banks, there are switching costs for customers.

Tremendous capital returns

During the second quarter, Bank of America generated $7.1 billion in net income. The business is consistently profitable. This setup allows management to return lots of capital to shareholders.

Bank of America bought back $5.3 billion worth of its own stock in Q2. And it paid out $2 billion in dividends. The current dividend yield of 2.29%, which is significantly higher than the's 1.25%, provides a nice income stream.

Investors can expect the capital returns to continue. Bank of America just approved authorization for $40 billion in share repurchases. And in the past decade, the dividend has climbed 460%.

Taking a cautionary view

Valuation can have a notable impact on the returns investors achieve. Bank of America shares trade at a price-to-book (P/B) ratio of 1.3 today. This is higher than the trailing five- and 10-year average.

Additionally, investors have to think about the broader economy. For what it's worth, there's always a certain level of uncertainty. And no one has any clue what interest rates are going to do, although there is a view that they will come down. Regardless, there's always the threat of a looming recession, which WOULD negatively impact Bank of America and the industry at large. This is something bank investors can't ignore.

The fact that Buffett and Berkshire have been selling could be an ominous signal. And maybe it's best if investors avoid Bank of America right now. That perspective could change if the valuation was much more compelling, like at a P/B multiple below one.