At the close of the 2025 third quarter, Berkshire reported cash and cash equivalents of $381.6 billion, the highest figure in company history. The war chest grew after Buffett trimmed two of Berkshire’s most prominent equity positions—Apple and Bank of America—releasing additional funds into the treasury. Berkshire’s latest filings with the U.S. Securities and Exchange Commission confirm the unprecedented cash level.
Buffett has repeatedly warned that cash is a poor long-term asset, even while insisting on adequate reserves to weather unexpected shocks. He compared liquidity to oxygen—cheap to hold, but disastrous to exhaust during a crisis. Nevertheless, he said he would prefer to redeploy roughly $100 billion into “a really good business at a sensible price” rather than allow the sum to sit idle.
The only major deal Berkshire announced in 2025 was the purchase of Occidental Petroleum’s chemical subsidiary, OxyChem, for $9.7 billion in cash. Although significant, the transaction was Berkshire’s largest since 2022, when it acquired insurer Alleghany for $11.6 billion, and it fell well short of the target size Buffett described as an “elephant.”
Buffett’s hunt for meaningful acquisitions is rooted in Berkshire’s sheer scale. The company’s market capitalization and operating earnings have expanded to the point where smaller deals—once impactful—now have negligible influence on overall performance. As a result, Berkshire evaluates only the largest corporations or assets as potential candidates, narrowing the pool of feasible transactions.
The liquidity buildup has placed Berkshire’s share performance under scrutiny. During 2025, the stock lagged major equity benchmarks, partly because investors questioned the return on such a large cash balance. Buffett’s measured approach historically received broad shareholder support, yet expectations may shift under new leadership.
Abel, 63, enters the chief executive role with established deal-making credentials. He previously led Berkshire Hathaway Energy and played central roles in several acquisitions across the utilities and infrastructure sectors. Observers note, however, that shareholders may not afford him the same latitude they granted Buffett to wait patiently for the ideal purchase. With Berkshire’s cash position approaching half a trillion dollars and the broader market still active, pressure to deploy capital efficiently could become Abel’s defining challenge.
The executive transition follows years of succession planning. Buffett remains chairman and intends to guide capital allocation alongside Abel, though operational control now rests with the new CEO. Buffett has said the leadership change will not alter Berkshire’s acquisition strategy, emphasizing discipline, long-term value, and conservative financing as guiding principles.
Within the company, Buffett’s preference for wholly owned businesses continues to shape decision-making. He has signaled openness to minority stakes when a full purchase is impractical, yet the preference remains to acquire companies outright and leave existing management teams in place. That model, he believes, fosters stability and aligns incentives for sustained performance.
As 2026 begins, investors are watching for signs of a landmark deal that could absorb a meaningful portion of Berkshire’s cash. Whether Abel can locate the elusive “elephant” Buffett sought—or whether market conditions will compel a different approach—remains uncertain. For now, the conglomerate carries the largest liquidity buffer in its history, a direct result of Buffett’s caution in the face of what he views as elevated valuations and limited opportunities of adequate scale.
Crédito da imagem: David A. Grogen
