2026-08-09

Berkshire Hathaway Q2 Net Income Doubles to $25.7B - Greg Abel Turns Net Buyer for First Time in 15 Quarters, Bets $10B on Alphabet

Written & reviewed by the TradeSmrt editorial team · 2026-08-09

In this article

What Happened
From 14 Straight Quarters of Selling to a $10 Billion Bet on Alphabet
A Mixed Report Card Across Segments - Rails and Energy Shine While Insurance Slips
What to Take Away From This
Sources

What Happened

On Saturday, August 8, Berkshire Hathaway (NYSE: BRK.A/BRK.B) released its second-quarter 2026 earnings. Reporting on a Saturday, when US markets are closed, is a long-standing Berkshire habit — instead of an immediate stock reaction, investors get the weekend to digest the numbers before the market responds when trading resumes Monday. The headline figure this quarter was net income: $25.67 billion, more than double the $10.106 billion Berkshire earned in the first quarter. Operating earnings, the metric Berkshire itself prefers because it strips out swings in unrealized investment gains, also grew a solid 16% year-over-year, from $11.16 billion to $12.98 billion.

But the number that actually moved the conversation wasn't net income — it was what Berkshire did with its cash. The company's cash and short-term Treasury holdings fell to $365.5 billion at quarter-end, down nearly $32 billion from the record $397.4 billion it held at the end of the first quarter. For years, that cash pile had symbolized a company sitting on its hands, waiting for opportunities that rarely came at a price it liked. Under CEO Greg Abel, that posture appears to be shifting — decisively.

From 14 Straight Quarters of Selling to a $10 Billion Bet on Alphabet

The most symbolically loaded number in the entire release: Berkshire bought $23.5 billion of equities in the quarter while selling only $3.7 billion, for net purchases of roughly $19.8 billion — call it $20 billion. That marks the end of a streak in which Berkshire had been a net seller of stocks for 14 consecutive quarters, making this the first net-buying quarter in 15. Add in roughly $4.5 billion of share buybacks, and the message from Abel's Berkshire is unambiguous: both the broader market and Berkshire's own stock look cheap enough to buy.

At the center of that shift is Alphabet (Nasdaq: GOOGL/GOOG). Back in June, Berkshire acquired $10 billion of newly issued Alphabet shares through a private placement — $5 billion in Class A common stock at $351.81 per share, and another $5 billion in Class C stock at $348.20 per share. The proceeds are earmarked to help fund Alphabet's roughly $80 billion AI infrastructure buildout. Berkshire first disclosed an Alphabet stake in the third quarter of 2025, when it held 17.8 million shares; by the end of the first quarter of 2026 that had already grown to about 54 million shares. With this latest $10 billion injection, Berkshire's total Alphabet position is now worth roughly $41 billion — enough to make it Berkshire's fourth-largest equity holding, surpassing the long-time flagship position in Coca-Cola. At the same time, Berkshire trimmed its Bank of America stake, a reminder that this shift from defense to offense isn't just about buying more — it's also a genuine reallocation across the portfolio.

What makes this especially notable is that Warren Buffett spent decades famously wary of pure technology bets, guided by his own rule of never investing in businesses he didn't fully understand. He didn't build a meaningful tech position until buying into Apple starting in 2016, and even then largely steered clear of the rest of Big Tech. That Berkshire — now under Abel's leadership since the handover from Buffett at the start of 2026 — has gone on to make a large private-placement investment in one of the companies at the center of the AI infrastructure buildout reads as a signal of how the firm's investing philosophy may be evolving under new leadership.

A Mixed Report Card Across Segments - Rails and Energy Shine While Insurance Slips

Break the quarter down by business line and a clear divergence emerges. Manufacturing, service and retailing earnings jumped 24% year-over-year to $4.47 billion, and Berkshire Hathaway Energy's profit surged 27% to $891 million. The railroad subsidiary, BNSF, posted a 6% increase in operating earnings to $1.56 billion as freight volume rose 6.5% from a year earlier — a solid read-through on the health of the broader US industrial economy.

Insurance, historically Berkshire's cash-generating engine, told a different story. Underwriting earnings fell 13% to $1.73 billion from $1.99 billion a year earlier, while insurance investment income declined 9% to $3.06 billion. The sharpest drop came at GEICO, the auto insurer, where underwriting profit plunged 45% — a result that reflects intensifying price competition and rising loss ratios across the US auto insurance industry more broadly. The contrast is instructive: industrial, energy, and rail businesses tied directly to real economic activity are humming along, while insurance — a business more exposed to competitive pricing pressure — is under strain. That split is itself a useful data point for anyone trying to read the health of the US economy heading into the second half of 2026.

What to Take Away From This

When a large capital allocator flips from defense to offense, pay attention. Berkshire ending a 14-quarter streak of net selling to become a net buyer is more than a single company's decision — it's a signal worth weighing when assessing how large institutional investors view current market valuations. That said, it's worth distinguishing between "the market looks cheap broadly" and "one specific stock, like Alphabet, looked especially attractive."
A cash pile isn't an end in itself — it's a tool for waiting on the right opportunity. Berkshire's cash climbing to a record and then falling illustrates how a skilled capital allocator is willing to sit on the sidelines indefinitely until a compelling opportunity appears. Rather than reacting to cash levels rising or falling in isolation, it's worth asking what specifically changed to trigger the move.
Segment-level detail tells a more complete story than a single headline number. The same company, the same quarter, produced growth in rail and energy alongside a pullback in insurance. Relying on one aggregate net-income figure risks missing that kind of divergence; breaking results down by business line gives a sharper picture.
Leadership transitions are worth watching for shifts in investing style over time. The move into Alphabet and the return to net buying, both occurring under Abel's stewardship since taking over from Buffett, illustrate how new leadership can extend or revise long-standing principles. When a company changes leaders, tracking whether — and how — its investment style shifts is a useful ongoing exercise.

Sources

This article synthesizes and analyzes the reporting below in our own words — it is not a reproduction of the original text. For the latest figures and full detail, please refer to the original sources.

⚠️ This article is for informational purposes only and is not investment advice. Market conditions change constantly - always verify the latest data yourself before making any investment decision.