For decades, investors viewed Berkshire Hathaway as a reliable vehicle for outperforming the overall stock market. However, this assumption may need to be questioned. A growing number of technical analysts are pointing to signs that Berkshire’s stock is losing momentum relative to the S&P 500. A chart analysis by 22V Research of Berkshire’s performance relative to benchmark indexes shows the stock has returned to levels relative to the S&P 500 last seen around 2007, suggesting little relative progress in nearly two decades. “Berkshire Hathaway has been a good bellwether for S&P, but that relationship appears to be changing,” 22V Research said in a note to clients. This comparison doesn’t mean Berkshire’s stock is struggling in absolute terms. The vast conglomerate has soared over the period and is now just 6% below its all-time high reached in November. Rather, the data highlights changes in relative performance. Despite decades of superior returns under Warren Buffett, Berkshire no longer consistently outperforms the broader market. This disconnect has become even more pronounced in recent years, as enthusiasm fueled by artificial intelligence has sent the stocks of the tech giants that dominate the S&P 500 soaring. Berkshire still owns a large stake in Apple, but has largely refrained from investing in many of the most profitable AI companies on the market. Some market observers also point out that Berkshire had a record first-quarter cash flow of nearly $400 billion. Bulls argue that cash provides enough firepower if the market stumbles. But critics see the company’s large cash reserves as a potential drag if the stock continues to rise. Under the new leadership of Chief Executive Officer Greg Abel, Berkshire also modestly resumed share buybacks after a nearly two-year hiatus, disappointing some investors who had hoped for more aggressive buybacks given Berkshire’s vast liquidity. Berkshire’s stock price is down about 4% since the beginning of the year, while the S&P 500 index is up 9%. BRK.B YTD Mountain Berkshire Hathaway Class B Stock Year to Date Buffett, who retired from the CEO role in early 2026, warned shareholders in his annual letter in 2023 that Berkshire’s size and structure made dramatic outperformance increasingly difficult. “With its current business structure, Berkshire should do a little better than the average U.S. company and, more importantly, should be able to operate with significantly less risk of permanent loss of capital,” Buffett said. “However, anything more than ‘slightly better’ is wishful thinking.” The comment reflects Buffett’s view that Berkshire’s mature, diversified portfolio of businesses, from BNSF Railway to See’s Candies, should continue to generate steady returns at lower risks, rather than the outsized profits that characterized much of its early history. It’s hard to match Berkshire’s long-term results. Since Mr. Buffett took control of the company in the 1960s, the conglomerate has generated annual profits roughly twice that of the S&P 500.
