Today, Berkshire Hathaway stock is significantly underperforming the S&P 500. Here’s a look at three reasons why the underperformance could be happening.
Buffett Premium Gone
That outperformance has led to what some referred to as the Buffett Premium, the fact that investors would pay a little higher valuation for Berkshire Hathaway stock and the value of its assets based on Buffett managing the money.
That premium may be all but gone.
A chart shared by Barchart on social media shows that since Buffett announced his retirement from Berkshire Hathaway, the conglomerate’s shares have underperformed the S&P 500 by 41 percentage points over the past year.
That underperformance is likely due to investors selling their shares of Berkshire after Buffett’s retirement announcement or his official retirement at the end of 2025.
Investors may also be discounting Berkshire Hathaway’s stock price. A look at the price-to-sales and price-to-book ratios for the stock shows declines over the last year, with investors assigning a lower multiple than they did when Buffett was leading the company.
Top Holdings Underperformance
Berkshire Hathaway stock has also lagged the S&P 500 because some of its top holdings have underperformed.
Here are the top 10 holdings in the investment portfolio as of Dec. 31, 2025 and their current year-to-date stock performance:
Of the top 10 holdings at the start of the year, only six are positive year-to-date in 2026 as of Tuesday. Of the 10 stocks, only four are beating the +6.0% year-to-date gain of the SPDR S&P 500 ETF Trust. This makes it easier to see how Berkshire Hathaway stock may be underperforming.
Berkshire Hathaway A shares are currently down 6% year-to-date in 2026.
Details On Cash, Stock Positions
Greg Abel is the new CEO of Berkshire Hathaway. Beyond details aimed at eliminating the company’s position in Kraft Heinz, Abel has provided minimal information on what the investment portfolio could look like going forward.
In his first shareholder letter, Abel did single out some of the company’s core holdings.
“Apple, American Express, Coca-Cola, and Moody’s — businesses we understand well, have a high regard for their leaders, and expect will compound over decades,” Abel previously said.
Berkshire Hathaway is sitting on a cash balance of more than $350 billion, and both Buffett and Abel have provided minimal clues as to what comes next.
With new leadership and a lack of details of what future plans hold, investors may be ready to move on from Berkshire Hathaway stock.
In the middle of May, investors will get more details on what the investment portfolio of Berkshire Hathway will look like moving forward. The company will have to release its quarterly 13F this month, which will show its top holdings and list buy and sell transactions made in the first quarter.
Investors will get their first look at what stocks were bought and sold by the company during Abel’s first quarter in charge, along with any existing holdings that shrank or grew in size.
Photo Courtesy: Photo Agency on Shutterstock.com
