Investors have come to the conclusion that Berkshire without Buffett is not the same.

Shares of Berkshire Hathaway, the investment firm of billionaire market guru Warren Buffett, have fallen more than 14% since May 2, the trading session before Buffett announced his retirement . During that time, the S&P 500 has gained 11% and broken record after record.

Berkshire's securities are significantly underperforming the broader US stock market. The difference in returns between the company's shares and the S&P 500 over the past three months has been the largest since spring 2020, the early stages of the pandemic. This difference was also slightly larger than during the market slump following the outbreak of the global financial crisis in 2008 and the bursting of the dot-com bubble in 2000. Investors are clearly concerned that Berkshire Hathaway will no longer be as attractive a company after Buffett's retirement as it was under his leadership.

On May 3, 2025, 94-year-old Warren Buffett announced that he would step down as Berkshire Hathaway CEO by the end of the year and that he had appointed 63-year-old Greg Abel, a Canadian executive who had served as the company's vice chairman since 2018, as its new CEO. Buffett assured that even in retirement, he would remain "close to Berkshire" to assist it whenever needed. This announcement was hailed by investors as "the end of an era."

From 1964 to the end of 2024, Berkshire Hathaway's stock value rose by 5,502,284%, while the S&P 500 gained 39,054%. It became the eighth-largest publicly traded company in the world by market capitalization (the largest not a technology or oil company). Its market capitalization reached $1.2 trillion at the beginning of May 2025, roughly equal to the nominal GDP of the Netherlands. At the end of the first quarter of 2025, its portfolio held a record $347.7 billion in cash, more than the GDP of Egypt. At that time, it also held shares in approximately 180 companies across various sectors.

Shareholders don't believe in Berkshire Hathaway without Warren Buffett?

In early August, Berkshire Hathaway released its second-quarter report. It showed that its operating profit fell 4% to $11.16 billion. The company also took a $3.8 billion writedown on Kraft Heinz shares and warned about the impact of tariff increases on its future results. Beyond that, however, the report showed the company remains healthy, with currency movements largely responsible for the decline in operating profit. (If this factor were excluded, profit would have been 8% higher than during the same period a year earlier.) Concerns about the impact of tariffs on earnings did not negatively impact stock prices before Buffett's announcement. "When tariff concerns began to mount, investors bought Berkshire shares, considering them safe," recalls Bill Stone, chief investment officer at Glenview Trust (a Berkshire Hathaway shareholder).

It's unclear who sold Berkshire shares in the last three months. However, many of its Class A shareholders are members of wealthy families who invested in these securities years ago. Some of them may have concluded that after the change in CEO, the company might not achieve the staggering investment successes of recent decades. In May, just before Buffett announced his resignation, Berkshire Hathaway's share price reached a record high of $812,855.

"These shares have become too expensive," says Christopher Bloomstran, CEO of investment firm Semper Augustus Investments. He believes the decline in these securities in recent months could, however, prompt Berkshire Hathaway to resume share buybacks. Berkshire has not conducted share buybacks since May 2024. It has also net sold shares of other companies in its portfolio over the past 11 quarters.