Berkshire Hathaway tops S&P 500 by 5.8 points as AI fears hit tech

The swing in Berkshire's relative performance has been sharp. A month ago its B shares lagged the S&P 500 by 13.6 percentage points for the year; three record-high closes this week flipped that to a 5.8-point lead. The move coincides with investors pulling money from slumping tech stocks and into what appears to be the relative safety of a traditional conglomerate with relatively little AI exposure, amid fears that massive data-center spending won't pay off.

Berkshire's own actions are part of the picture. It more than doubled share repurchases last quarter to $9.6 billion even as operating earnings declined slightly. Its shares have also fully recovered from the roughly 15% drop suffered in the three months after Warren Buffett's surprise announcement at the 2025 shareholders meeting that he would step down as CEO at the end of that year. They are now up 6% from the record closes hit the Friday before that May 3, 2025 revelation.

The newsletter also notes scrutiny of Berkshire's stock picking. Bloomberg suggests Berkshire's push into AI may look ill-timed as cracks in the AI trade show, pointing to Alphabet: the stake fell from $37.8 billion on June 30 to $30.2 billion, dropping behind Coca-Cola. Barron's Andrew Bary estimates a $3 billion loss on Alphabet and calls the company's stock picking disappointing this decade, while CFRA's Cathy Seifert questions whether the AI move is "a little late." Keefe, Bruyette & Woods analyst Meyer Shields says Abel probably sees AI bets as a long-term wager consistent with Berkshire's conservatism.