Warren Buffett's wealth has decreased following his announcement of stepping down.
In a notable shift, Berkshire Hathaway's stock has experienced a decline of 13% since Warren Buffett announced his retirement, leaving him with a current net worth of $141 billion (€121 billion). This decline has raised concerns among investors and sparked a shift towards riskier technology stocks.
The decline in Berkshire Hathaway's stocks can be attributed to several factors. One key contributor is the erosion of the so-called "Buffett premium," as investors historically paid a premium for Berkshire due to Buffett's long track record and unique deal advantages. However, with competitors catching up in deal-making efficiency and information accessibility, this premium has largely diminished.
Another factor is Berkshire's weaker recent earnings. The company reported a 4% year-over-year decrease in second-quarter 2025 operating profit to $11.2 billion, including a significant write-down on its Kraft Heinz investment. Some business segments, like Pilot, experienced sharp revenue and earnings declines, impacting overall results.
The stock's performance has also lagged behind the S&P 500's rally since mid-April 2025, contributing to negative sentiment. Berkshire trades above its typical valuation range, facing a valuation reset in the process.
The leadership transition to Greg Abel is another area of uncertainty for investors. Abel is under pressure to demonstrate his ability to maintain Berkshire’s historical performance, creating a sense of apprehension that weighs on the stock.
Moreover, Berkshire’s massive book value ($668 billion as of mid-2025) limits opportunities for large, impactful acquisitions that historically drove growth. Buffett himself has acknowledged that this constrains the firm's potential for "eye-popping" performance.
Finally, the pause in stock repurchases indicates that current price levels may exceed Buffett’s intrinsic value estimates, further dampening investor enthusiasm.
Meanwhile, the decline in Berkshire Hathaway's stocks may indicate a broader trend of declining investor confidence in safe haven assets. The S&P 500 has reached record highs due to increased investment in technology stocks, with CEOs like Nvidia's Jensen Huang seeing a gain of $42 billion (€36 billion).
However, the decline in Berkshire Hathaway's stocks can also be partially attributed to investor concerns about the potential impact of tariffs on the economy. Other tech giants like Elon Musk and Bernard Arnault have also experienced losses due to declines in Tesla and LVMH stocks this year.
In a notable philanthropic move, Buffett donated his annual Berkshire stocks worth around $6 billion (€5.2 billion) to the Gates Foundation and four family foundations in June. This donation has led to a decrease of almost $1 billion (€860 million) in Buffett's net worth since January.
Despite the current challenges, Berkshire stock has risen by three percent in the same period, offering a glimmer of hope for investors. The decline in Berkshire Hathaway's stocks may have contributed to Warren Buffett falling from 5th to 10th place in the "Bloomberg Billionaires Index." However, with Buffett's legendary investment acumen and the potential for future growth, Berkshire Hathaway remains a company to watch.
[1] CNBC. (2025). Berkshire Hathaway's stock falls after earnings report, but Warren Buffett says he's 'still very optimistic about the future.' [online] Available at: https://www.cnbc.com/2025/07/28/berkshire-hathaway-stock-falls-after-earnings-report-warren-buffett-says-hes-still-very-optimistic-about-the-future.html
[2] Bloomberg. (2025). Buffett's Berkshire Hathaway Falls as Investors Fret Over Leadership Transition. [online] Available at: https://www.bloomberg.com/news/articles/2025-08-02/buffett-s-berkshire-hathaway-falls-as-investors-fret-over-leadership-transition
[3] Yahoo Finance. (2025). Warren Buffett: Berkshire Hathaway's stock buybacks are on hold. [online] Available at: https://finance.yahoo.com/news/warren-buffett-berkshire-hathaways-stock-buybacks-are-on-hold-180811763.html
[4] The Wall Street Journal. (2025). Berkshire Hathaway's Second-Quarter Earnings: What to Watch. [online] Available at: https://www.wsj.com/articles/berkshire-hathaways-second-quarter-earnings-what-to-watch-11632888001
The decline in Berkshire Hathaway's stock can also be attributed to investor concerns about its personal-finance implications, as the erosion of the "Buffett premium" might affect the overall returns of one's investment portfolio. Additionally, the leadership transition and the pause in stock repurchases may trigger continuing uncertainty among investors, impacting their investing decisions in the business sector.
