Shares in Warren Buffett’s Berkshire Hathaway hit a record high last week, reaching a new milestone and in the process moving closer to becoming the first U.S. company outside technology to achieve $1 trillion in market value. The Omaha-based juggernaut climbed 2% in the past week to hit an all-time high of $600,531, piercing the $600,000 mark for the first time ever on an intraday basis. Berkshire has gained more than 10% in 2024, doubling the S & P 500 ‘s return. The swift rally has pushed Berkshire’s market cap above $863 billion as of Friday’s close, making it the seventh most valuable company in the U.S. The old-economy conglomerate — owner of BNSF Railway , Geico Insurance and Dairy Queen — could be the next to join the trillion dollar club, and the only non-technology company to do so in the U.S. (Overseas, PetroChina and Saudi Aramco are the only two companies with a market cap above $1 trillion.) At the end of December, Berkshire was worth about $777 billion, according to FactSet. At the end of 2022 — about $682 billion. Road to 600k It took Berkshire Class A shares about two years to go from $500,000 to $600,000. During the past two years, the “Oracle of Omaha” made several big moves — acquiring insurer Alleghany for $11.6 billion, building a near 30% stake in Occidental Petroleum and pulling off a quick turnaround at Geico. The 93-year-old investment icon also bought billions of dollars worth of of Treasury bills to take advantage of rising interest rates. He also continued to build on his large, winning stakes in Japanese trading companies. Berkshire held a record amount of cash at the end of September — more than $157 billion. Fourth-quarter earnings are due out later this month. Mag 7? Now that Berkshire stands at the No. 7 spot on the market cap pyramid, there’s lately been chatter about Buffett’s company maybe replacing Tesla in the “Magnificent 7” group of stocks that led the market higher in 2023. The Mag 7 crowd — Microsoft , Alphabet, Amazon, Apple , Meta Platforms , Nvidia and Tesla — collectively rallied a whopping 75% in 2023, providing the overall market a huge helping hand. While most continued their jaw-dropping advance into the new year — Nvidia is higher by 46% in just six weeks — Tesla has slumped by 22% in 2024 while Apple has retreated about 2%. Wall Street research firm Strategas Securities recently named Berkshire one of the three stocks that could replace Tesla in the Mag 7 group, along with Broadcom and Eli Lilly . In terms of market cap weighting and earnings contribution to the S & P 500, Berkshire is now the best candidate to join the crowd, Strategas said. High price tag Berkshire’s original Class A shares carry one of the highest price tags on Wall Street . Today, each one sells for about 45% more than the median price of a home in the U.S. That’s because Buffett has never split the stock, arguing that the high share price attracts and retains more long-term, quality-oriented investors. The Ben Graham protege has said that many Berkshire shareholders use their stock as a savings account. Still, Berkshire issued Class B shares in 1996 at a price equal to one thirtieth of a Class A share to cater to smaller investors wanting a small piece of the Buffett’s performance. Berkshire’s Class B shares have gained more than 11% this year and also hit an intraday record of $399.15 earlier this week.
