Warren Buffett Doesn’t See Much Reason to Deplete Huge Cash Pile

Shares of Warren Buffett’s Berkshire Hathaway have climbed more than 11% this year, ballooning its market cap to $862 billion as the company held its annual shareholder meeting over the weekend. But that’s not all that’s inflating. 

The Omaha, Nebraska, investment conglomerate reported that its cash pile reached a record $189 billion in the first quarter, continuing a trend from this time last year: Warren Buffett & Co. just aren’t into that many companies these days.

Bearish Buffett

The 93-year-old Buffett, who allowed Coca-Cola to slap a caricature of his likeness on cans for free when the soda maker launched Cherry Coke (his favorite) in China in 2017, remains as lighthearted and goofy as ever. 

And business isn’t bad either — Berkshire has outpaced the 8% return of the S&P 500 in 2024, while first-quarter operating profit rose 39% to a record $11.2 billion. 

On the other hand, Berkshire sold just under $20 billion worth of stock and bought only $2.7 billion over the first quarter, which drove the total value of its stock portfolio lower to $336 billion from $354 billion at the end of 2023. In the new world of AI-this-and-that, miracle weight-loss drugs, and peskily high interest rates, Buffett sees a lot of meh, and seems more than happy to let Berkshire’s cash pile up. “I don’t think anyone sitting at this table has any idea how to use it effectively, and therefore we don’t use it,” Buffett said:

• Apple, Berkshire’s biggest holding, is going through a bit of an adjustment phase. The iPhone maker is losing market share in China to local smartphone manufacturers and also canceled plans to release an autonomous electric vehicle. However, its recent earnings report seemed to assure investors the worst was behind it and hinted that it’s about to get bullish on the AI race. 
• Berkshire’s approach to Apple has mostly followed the flux. Between the last two quarters, Berkshire has sold off roughly 13% of its holdings in Apple, reducing its stake to $135 billion. Nevertheless, Buffett continued to praise the tech giant, calling it “an even better business” than American Express or Coca-Cola, and saying it’s “extremely likely” Apple will remain Berkshire’s largest stock position at the end of the year.

Poor Paramount: Berkshire also dumped its entire Paramount Global stake, which amounted to roughly 10% of the company, with Buffett saying it came at a loss without specifying the amount. “It was 100% my decision and we’ve sold it all and we lost quite a bit of money,” Buffett told investors. “I did it all by myself, folks.” Luckily for Berkshire shareholders, that choice came from the same guy whose stock has materially outperformed the S&P 500 during his time at the helm. Imagine trying to explain to your grandkids how cool it once was trekking to Omaha to hear a nonagenarian wax on about companies like Occidental Petroleum and Dairy Queen.