While Wall Street is still debating the return prospects of capital expenditures for AI, a trillion-dollar giant composed of insurance, railway, energy, and traditional consumer businesses is quietly reaching new historical highs.

On November 2nd local time, Berkshire Hathaway's Class B shares closed at $556.11, with a peak of $557.59 during the session, both setting new historical highs. Meanwhile, the trading of AI in the U.S. stock market faced challenges: the Nasdaq index fell by 5.3% in October, and concerns about whether the huge AI investments by tech giants would yield returns continued to rise.

On one hand, AI technology stocks are under pressure, while on the other hand, "veteran investor" Berkshire Hathaway is strengthening. This contrast in market styles is becoming one of the most noteworthy changes in the U.S. stock market recently.

The rise in Berkshire Hathaway is not only the result of defensive funds seeking new footholds but also indicates that the market is gradually digesting the uncertainties brought about by Buffett's retirement CEO. For Greg Abel, who will succeed the "Oracle of Omaha," this round of stock price rebound is undoubtedly a positive sign.

Over the past period of time, AI has almost become the most core trading theme in the US stock market. Tech giants have continuously increased their investments in data centers, chips, and computing infrastructure, driving the related stocks to rise steadily.

But cracks are appearing in this feast.

As the performance of tech giants such as Alphabet and Amazon failed to fully meet market expectations, investors have begun to re-evaluate the cost and return on AI investments. The substantial capital expenditures require continuous financing, and whether these investments can be converted into sufficient cash flow within a reasonable time frame has become a focal point of market attention.

In October, the NASDAQ index fell by 5.3%, and stocks related to AI experienced significant selling pressure. The market is no longer focusing solely on technical prospects and has begun to question: When will such a large investment be able to be converted into profits?

Against this backdrop, Berkshire's advantages gradually became apparent.

This company, with a market value of over $1.1 trillion, has diversified businesses in insurance, railways, energy, industry, and more, and its annual after-tax profit is close to $50 billion. As of the end of the second quarter, the company's cash and cash equivalents amounted to over $365 billion.

A substantial cash reserve provides Berkshire with a buffer against market fluctuations, and its diversified business structure also ensures that it does not have to rely entirely on the growth of any single industry.

More importantly, Berkshire is not merely a collection of traditional industries. In its stock portfolio of approximately $360 billion, core holdings such as Apple and Coca-Cola have performed well recently, providing support for the company's asset value as well.

Judging from market performance, funds are re-evaluating the defensive value of Berkshire Hathaway. Over the past month, Berkshire's stock price has risen by about 5%, and against the backdrop of a decline in trading of AI, investors' concern for asset safety and profit stability has significantly increased.

Another significance of Berkshire Hathaway's record-breaking stock price is that the uncertainty surrounding the management transition is gradually dissipating.

In May 2025, Buffett announced at the annual shareholders' meeting that he would step down from his position at CEO by the end of that year. This news triggered a sell-off in the market, with investors concerned about whether Berkshire, without Buffett, would be able to continue its long-standing ability to manage capital allocation.

After Abel officially took over from CEO at the end of 2025, Berkshire Hathaway's stock price was once sluggish. However, as time went on, the market's concerns about this transition gradually subsided.

Abel did not make significant changes to the management system established by Buffett.

In his first annual letter to shareholders, he stated that Berkshire would continue to maintain a decentralized management structure, with each business unit having broad operational autonomy; the company would also continue to keep a centralized stock investment portfolio, and long-term core holdings would remain an important part of capital allocation.

Abel joined Berkshire in 1999, having previously been in charge of Berkshire Hathaway's energy business. Today, he is taking over a mature system that has been in operation for decades, rather than a company that needs to be completely rebuilt.

Berkshire's historical performance has also provided confidence to the market.

From 1965 to 2025, Berkshire Hathaway only recorded declines in 11 years, with a cumulative return of approximately 6,099,294%, and an annualized return rate of 19.7%. During the same period, the S&P 500 index had a cumulative return of about 46,061%, with an annualized return rate of 10.5%.

This record does not stem from short-term betting, but rather from the compounding effects of holding high-quality companies over the long term, utilizing insurance surplus funds for capital allocation, and continuously accumulating operating assets.

However, a new high in stock prices does not mean that Abel has fully passed the test. The time since he took over is still limited. The market's recognition of Berkshire is more likely a revaluation of its asset quality and business structure, rather than a final judgment on the capabilities of the new CEO.

As of the end of the second quarter of 2026, Berkshire Hathaway's cash and cash equivalents exceeded $365 billion. This fund serves not only as a safety cushion for the company to cope with market downturns but also as an important resource for seeking investment opportunities in the future.

But cash reserves also mean pressure.

Berkshire has for a long time not paid dividends, and the market has been able to accept this policy largely due to trust in Buffett's ability to allocate capital. With Abel taking over, investors may pay more attention to whether this cash will be used for acquisitions, stock investments, or will it remain on the balance sheet?

For Berkshire Hathaway, whose market value has already exceeded $1 trillion, it is becoming increasingly difficult to find large-scale investment opportunities that can significantly drive overall performance growth.

Abel has already begun to adjust his investment portfolio.

Apple remains Berkshire Hathaway's largest stock holding. As of the end of June, the company held 227.9 million Apple shares, valued at approximately $66 billion, accounting for about 22% of its stock investment portfolio. This proportion has significantly decreased from a previous peak of nearly 50%.

Berkshire once reduced its holdings in Apple by about 75% from a position of approximately 915 million shares around mid-2023. Buffett previously explained that Apple's holdings were too large relative to Berkshire's overall portfolio size.

However, Berkshire has not continued to sell Apple shares since the end of 2025. The market will be watching the company's next 13F report to determine whether it will make further adjustments to its holdings in the third quarter.

Meanwhile, Berkshire Hathaway is also looking for new investment opportunities. In the second quarter of 2026, the company purchased approximately $17 billion worth of Alphabet shares, of which about $10 billion came from direct purchases of Alphabet.

This means that Abel did not simply copy Buffett's past investment portfolio, but rather, while continuing with the long-term investment framework, he tried to find new opportunities for capital allocation.

Berkshire Hathaway's stock price hitting a record high does not necessarily mean that the market has completely abandoned trading in AI.

But at least for now, investors are re-evaluating the valuation logic of assets: as the relationship between substantial capital expenditures and future returns becomes less certain, companies with ample cash reserves, diversified businesses, and relatively stable profitability are beginning to regain their attractiveness.

Berkshire Hathaway is precisely a representative of this logic.

It boasts substantial cash reserves, mature operating assets, and a long-term investment portfolio, as well as a capital allocation system that has been proven over several decades. Buffett's departure was once the biggest concern for the market, but now that the stock price has once again reached historical highs, it indicates that investors have at least begun to accept the possibility of Berkshire continuing its success in the new era.

However, Berkshire's long-term performance still depends on whether Abel can continue to create value. For this trillion-dollar company, how to make use of its vast cash reserves and how to find sufficiently large investment opportunities are the real challenges ahead.

AI moves downward, while Lao Deng moves upward. The switch in market style may be just temporary, but Berkshire Hathaway is proving that beyond the tech narrative, capital markets are still willing to pay for solid asset quality and long-term capital allocation capabilities.