It finally happened. On January 1, 2026, Warren Buffett officially stepped down as CEO of Berkshire Hathaway. For sixty years, the man was the heartbeat of Omaha. Now, Greg Abel is in the big chair. People are panicking. You see the ticker symbols BRK.A and BRK.B flashing red, and the first instinct is to think the empire is crumbling without the Oracle.
But is that actually what's happening?
Honestly, if you're asking why is berkshire hathaway stock down, you have to look past the "Buffett is gone" headlines. The stock has been oscillating around the $500 mark for Class B shares recently, showing a bit of softness. It’s down roughly 1% over the last month while the S&P 500 has been climbing. That divergence feels weird. It’s uncomfortable. But when you dig into the mechanics of the conglomerate, the reality is a lot more "boring" than a leadership crisis.
The Post-Buffett Hangover is Real
Markets hate uncertainty. Even though we’ve known Greg Abel was the successor for years, the actual "Day 1" of a world without Buffett at the helm creates a psychological weight.
Investors are human. They get jittery. Some long-term holders, who were only in the stock because they trusted Buffett’s personal "magic touch," are finally hitting the sell button. It’s a transition period. The technicals show a Relative Strength Index (RSI) hovering around 48, which basically means the stock is in a neutral no-man's land. It’s not being dumped in a fire sale, but nobody is rushing in to buy the dip yet either.
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Greg Abel's New Reality
Greg Abel isn't trying to be Warren. He’s a different kind of manager—more focused on the nuts and bolts of the energy and railroad operations.
There’s a growing theory that Berkshire might start behaving more like a "normal" company. Rumors are swirling about a potential dividend. Buffett always hated dividends; he wanted to keep every penny to reinvest. If Abel signals a shift toward returning cash to shareholders, it might actually change who wants to own the stock. Right now, the market is trying to price in that identity shift.
Why Is Berkshire Hathaway Stock Down? Look at the Cash Pile
One of the biggest drags on the stock right now is ironically its greatest strength: cash. Berkshire is sitting on a mountain of it—well over $300 billion.
In a screaming bull market where tech stocks are flying, holding cash looks like a mistake. Investors see the S&P 500 hitting record highs and they get frustrated. They ask, "Why isn't this money working?"
- Net Selling: Berkshire has been a net seller of stocks for twelve straight quarters.
- The Apple Exit: They’ve slashed the Apple position by more than 70% over the last couple of years.
- Zero Buybacks: In the last five quarters, they haven't even bought back their own stock.
When a company doesn't think its own stock is cheap enough to buy back, the market takes notice. It’s a signal. If the smartest guys in Omaha aren't buying BRK.B at $500, why should you? This "strike price" awareness is keeping a lid on the share price.
The Valuation Gap
Interestingly, some analysts think the market is being way too pessimistic. If you run a discounted cash flow model, some estimates suggest the intrinsic value of Berkshire is actually closer to $750 per Class B share.
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Why the gap?
Because the market is currently valuing Berkshire as a collection of slow-growing "old economy" businesses like Geico, BNSF Railway, and various utilities. It’s ignoring the sheer massive earning power of those companies because they aren't "AI plays."
Earnings Pressure and the Insurance Cycle
We can't ignore the math. The consensus earnings estimate for the current quarter is around $4.89 per share, which is a significant drop—about 27%—from a year ago.
Insurance is a fickle beast. Berkshire’s property and casualty divisions, including the giant Chubb, face shifting cycles. When catastrophe losses hit or when the "soft market" (where premiums are lower) persists, the bottom line takes a bruise.
"Even the best strategists can't beat the market forever when the portfolio gets this big."
That’s a hard truth. When you’re managing hundreds of billions, you can’t just buy a small, fast-growing tech company and move the needle. You have to buy entire industries. And right now, the industries Berkshire owns—energy, transport, and insurance—are facing some headwinds from a cooling global economy and higher operational costs.
Technical Support Levels to Watch
If you’re looking for a bottom, keep an eye on the 100-day Simple Moving Average (SMA). Right now, that sits around $496.
The stock has found support there before. If it breaks below that, we might see a slide toward the $450 level, where it spent most of 2024. But for now, the "Smart Money" seems content to let it drift.
There is also a weird "valuation paradox" happening. Berkshire trades at a P/E of about 15.8x. Compared to the broader market, that’s cheap. But compared to other diversified financial companies, it’s actually a bit of a premium. Investors are trying to decide if that "Omaha Premium" still deserves to exist without the man who created it.
What Happens Next?
The next big catalyst is the earnings report on February 23, 2026. This will be the first real look at the company’s performance under the "official" Abel era.
If the company announces a massive new acquisition—using that $300 billion "elephant gun"—the stock will likely rocket. But if they just report more cash accumulation and more selling of equities like Bank of America, expect the stagnation to continue.
Actionable Insights for Shareholders:
- Check the 13-F filings in February. This will reveal the final moves Buffett made before retiring. If he was buying silver or another commodity, it tells you he was worried about inflation.
- Watch the buyback language. If Greg Abel starts buying back shares at $490, it’s a massive "Buy" signal for everyone else.
- Ignore the daily noise. Berkshire isn't a "trade." It’s a sovereign wealth fund disguised as a company. If you’re worried about a 1% monthly dip, you might be in the wrong asset.
Monitor the spread between the stock price and the book value. Historically, when the price gets close to 1.2x book value, it’s an incredible deal. We aren't quite there yet, which is exactly why the stock is "down" and waiting for its next move.
Keep a close eye on the February earnings call for any mention of a dividend policy change. A dividend could bring in a whole new class of institutional investors, potentially providing a floor for the stock price that hasn't existed in decades.