Berkshire Hathaway Has Declined Over 10% Since Warren Buffett Announced His Retirement. Is the Stock a Buy?
Berkshire Hathaway (BRK.B) (BRK.A), the storied conglomerate synonymous with investment legend Warren Buffett, has seen its stock price tumble more than 10% since Buffett announced his retirement as CEO at the company’s annual shareholder meeting in early May 2025. The decline marks a significant shift for the company, which has long enjoyed a “Buffett premium” — a valuation boost attributed to investor confidence in Buffett’s stewardship.
On May 3, 2025, Warren Buffett, age 94, stunned shareholders by revealing he would step down as CEO at the end of the year, ending a 60-year tenure that transformed Berkshire Hathaway from a struggling textile firm into a trillion-dollar conglomerate. Greg Abel, Berkshire’s vice chairman, was named as his successor, a move that had been anticipated but still sent shockwaves through the investment community.
The immediate aftermath saw Berkshire’s Class A shares fall from a record $809,350 to $769,960, while Class B shares dropped from $539.80 to $512.94 — a roughly 5% dip in both classes in the days following the news. However, the selloff continued over the subsequent weeks, with both classes of shares now down more than 10% from their pre-announcement highs.
Analysts attribute the decline in part to the evaporation of the so-called “Buffett premium.” For decades, investors were willing to pay extra for Berkshire stock, betting on Buffett’s legendary investment acumen and steady hand. With his retirement, some of that confidence has eroded, and the company’s shares are now trading more in line with their intrinsic value, rather than the mystique of Buffett’s leadership.
The timing of Buffett’s retirement announcement coincided with a period of underperformance for Berkshire. While the S&P 500 Index ($SPX) has risen about 5% since March, Berkshire’s Class B shares have fallen from a 52-week high of $542.07 to around $484, a decline of over 10% during the period.
The leadership transition is not the only factor weighing on Berkshire’s stock. The company reported a 14% year-on-year drop in operating profit to $9.64 billion in the first quarter of 2025, and net profit plunged 64% to $4.6 billion. Losses related to California wildfires and weaker performance in some of its key businesses have further dampened investor sentiment.
While Buffett will remain as chairman through the end of the year and continue to mentor Greg Abel, some analysts warn that the stock could fall further if investor confidence continues to wane.
Still, others see the pullback as a potential buying opportunity, given Berkshire’s strong balance sheet and diversified portfolio. The company holds over $300 billion in cash and short-term investments, positioning it to weather market volatility and seize new opportunities.
Warren Buffett’s advice and acumen have never been limited to just his ability to pick stocks. Probably more importantly, Buffett’s wisdom extends to his ability to pick and mentor people as well. It’s highly unlikely that Buffett would have left his life’s work to Abel if he didn’t feel as if he could do just as well, if not better, than Buffett himself. This means the worries about lackluster performance are likely overblown, and investors shouldn’t be too concerned about the change of leadership.
Warren Buffett’s retirement marks the end of an era for Berkshire Hathaway. The company’s 10% stock decline since his announcement reflects both the loss of a legendary leader and broader concerns about future performance. As Greg Abel prepares to take the helm, investors and analysts alike will be watching closely to see whether Berkshire can maintain its storied legacy in the post-Buffett era.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com