Berkshire Hathaway, led by Warren Buffett, has become the first non-tech US company to reach a market value of $1 trillion, joining the ranks of tech giants like Apple, Microsoft, Amazon, Nvidia, Meta, and Alphabet.
Buffett transformed Berkshire from a small textile firm into a successful investment company in the 1960s, with his strategic investments consistently outperforming the market through his long-term vision, value investing principles, and ability to identify undervalued companies, resulting in an average annual gain of 20% since 1965.
Berkshire's diverse portfolio includes insurance (Geico), railways (BNSF), fast food (Dairy Queen), batteries (Duracell), and significant stakes in companies like Apple, Coca-Cola, and American Express, across sectors like insurance, reinsurance, railways, and utilities, helping diversify and reduce risks.
Recently, Buffett has taken a defensive stance, raising Berkshire's cash reserves to a record $277 billion while selling shares, including Apple and Bank of America, reflecting the company's prudent investment approach and Buffett's struggle to find attractive investment opportunities.
Berkshire Hathaway's stock price rose, enabling it to surpass a trillion-dollar market value, with its stocks growing by around 30-35% in 2023, outperforming the S&P 500 and adding over $200 billion to its market capitalization, amid optimism about the US economy and expected interest rate cuts.
Warren Buffett, soon to turn 94, has been chairman of Berkshire Hathaway since 1970, transforming it from a small textile company to one of the world's highest-valued enterprises, elevating him to one of the richest individuals globally.
Berkshire Hathaway's market value exceeding $1 trillion reflects investors' confidence in the company led by Warren Buffett, known as the "Sage of Omaha," who advocates for a rational, long-term investment approach.
Apart from Berkshire Hathaway, all other US companies with market values over $1 trillion are in the tech industry or related to it. Previous members of the $1 trillion club include PetroChina and Tesla Inc. Nvidia reached the milestone just 15 months ago and Meta Platforms re-joined the club this year.
Berkshire's valuation is calculated based on the number of Class A and Class B shares outstanding as of July 23, with stock repurchases slowing down this year. Berkshire's various businesses, such as insurance, energy, manufacturing, retail, and services, generated $22.8 billion in profit in the first half of the year, marking a 26% increase.
Warren Buffett was selected as the most trusted person with investing life savings by Benzinga readers in a recent poll. The readers polled named Eli Lilly and Company, Taiwan Semiconductor Manufacturing, Broadcom Inc, Tesla, and Walmart Inc as potential companies to reach the $1 trillion market cap next.
Berkshire Hathaway shares have seen significant gains over the past year and five years, contributing to its market value surpassing $1 trillion.
This article was written in collaboration with Generative AI news company Alchemiq
Sources: NYTimes, The Guardian, Xinhuanet, Die Welt, Benzinga, Zeit Online, MarketScreener, La Republica, Economie Matin, India Today, Hindustan Times, NewsX, Verlagshaus Jaumann, Haller Kreisblatt, Affaritaliani, NBC Bay Area, Ad Hoc News, Tiscali, FNP.