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LivestreamMenuBerkshire Hathaway shares climbed Monday after stronger operating results and a pickup in capital deployment won praise from Wall Street analysts. Michael Burry remains unconvinced. The conglomerate’s Class B shares rose 2% in morning trading after Berkshire reported a 16% increase in second-quarter operating earnings , fueled by strength in its energy, railroad and other businesses that more than offset weaker insurance underwriting. Investors also cheered signs that Berkshire is putting more of its massive cash pile to work under new CEO Greg Abel. The company repurchased about $4.5 billion of its own shares during the quarter, a sharp acceleration from just $235 million in the first three months of the year. Berkshire also became a net buyer of stocks for the first time in 15 quarters, purchasing nearly $20 billion more equities than it sold. Its cash pile declined to $365.5 billion at the end of June from a record $397.4 billion three months earlier. “We continue to view Berkshire as an attractive defensive investment, supported by a strong balance sheet, upside to earnings from operational improvements, and deployment of excess cash into accretive acquisitions and/or share repurchases,” UBS analyst Brian Meredith said in a note. Burry has doubts But Burry, the investor best known for his wager against the housing market before the financial crisis, sees reason for concern in Berkshire’s new era. His criticism centers on whether Abel, 64, will maintain the patience that defined Buffett’s investing approach. “My biggest fear for Berkshire Hathaway was that when Warren finally stepped down, the successor would be too old and otherwise not Warren, so would not have his patience for the fat pitch,” Burry said in an X post Sunday. “I believe this fear has come true. I do not find Berkshire an attractive investment going forward.” Burry’s comments indicated he may be worried Abel could feel pressure to deploy Berkshire’s enormous cash pile and deliver results for shareholders over a shorter time horizon, rather than wait for the kind of unusually attractive opportunities Buffett is known to favor. Others on Wall Street disagree. Analysts at TD Cowen also highlighted that Berkshire “finally deployed cash” as buybacks increased and its equity portfolio expanded, led by purchases of Alphabet shares. The filing indicated Alphabet is now among Berkshire’s five largest equity holdings. Berkshire disclosed a $10 billion investment in the Google parent earlier this year to help fund AI development. Warren Buffett has said he initiated the investment after consulting with Abel. “My broader conclusion is that Berkshire’s earnings beat was less about the quarter itself and more about the early evidence that Greg Abel is actively putting Buffett’s cash hoard to work while maintaining Berkshire’s long-standing discipline around capital allocation,” said Bill Stone, CIO of The Glenview Trust Company.Read More
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