Berkshire Starts Putting Its Record Cash Pile to Work

Berkshire Hathaway's second quarter delivered something investors had been waiting years to see: a meaningful decline in the conglomerate's enormous liquidity pile accompanied by a clear return to net stock buying. The company did not abandon its fortress balance sheet, but it finally began deploying more of it at once.

Berkshire bought about $23.5 billion of publicly traded equities during the quarter and sold roughly $3.7 billion. That left net purchases near $19.8 billion. The direction matters because Berkshire had been a net seller for 14 consecutive quarters, steadily converting parts of its equity portfolio into cash and short-term U.S. Treasury bills.

The largest disclosed move was a $10 billion investment in Alphabet. In early June, Alphabet agreed to sell shares to a Berkshire affiliate through a private placement. SEC filings show more than 14.2 million Class A shares and more than 14.3 million Class C shares in the transaction. Alphabet was raising a much larger pool of equity capital to support its expansion of AI infrastructure and computing capacity.

Berkshire also stepped up purchases of its own stock. The company formally resumed repurchases on March 4 after a hiatus of nearly two years. In the second quarter it spent about $4.5 billion on Class A and Class B shares. For Berkshire, buybacks are more than a routine capital-return program: management has historically tied them to an assessment of value rather than a fixed quarterly schedule.

A third channel for capital was M&A. Berkshire agreed to acquire homebuilder Taylor Morrison for $72.50 a share. The often-cited $6.8 billion figure is the deal's equity value; enterprise value was about $8.5 billion. The transaction closed on July 24, after the second quarter ended, so it should not be counted as a June-quarter cash outflow. Strategically, however, it expands Berkshire's existing housing footprint alongside Clayton Properties Group.

The combined activity helped bring down a cash-and-Treasury reserve that had become almost a story of its own. Berkshire ended the first quarter with roughly $397.4 billion in liquidity by widely used measures. By the end of June, reports put the comparable total at about $365 billion, with small differences depending on the treatment of unsettled transactions and exact definitions. The broad point is unchanged: the pile finally declined.

Earnings provided plenty of internal firepower. Berkshire reported net income of about $25.67 billion, more than double the year-earlier level, with investment gains making a major contribution. Operating earnings, a cleaner measure of the performance of Berkshire's controlled businesses, rose roughly 16% to $12.98 billion. Manufacturing and retail operations were strong.

The timing makes every capital decision unusually consequential. Greg Abel became chief executive at the start of 2026 after Warren Buffett stepped down from the CEO role. Buffett remains chairman. That transition means investors are not only asking whether a purchase is attractive; they are also asking what it says about Berkshire's post-Buffett decision-making system.

One prominent skeptic is Michael Burry. MarketWatch reported that Burry wrote on Substack that he no longer finds Berkshire attractive as a forward investment and questioned the early moves of the new era. That is an investment opinion, not a verifiable forecast, but it captures the central debate around succession risk.

It is too early to declare a wholesale strategy change. Berkshire's own liquidity policy still calls for maintaining at least $30 billion of cash, cash equivalents and short-term U.S. Treasury bills, and the actual reserve remains more than ten times that floor. The company is still built to withstand crises and preserve optionality.

What did change in the second quarter was behavior. Berkshire simultaneously committed significant capital to external equities, its own shares and a major operating-business acquisition. One quarter cannot prove a new philosophy, but it can mark the end of an old pattern. Fourteen straight quarters of net stock selling are over.

That distinction matters for U.S. shareholders because a lower cash total is not automatically a higher-return portfolio. The relevant question is what Berkshire receives in exchange for giving up some of its liquidity. Alphabet exposes the group to a large technology platform during a capital-intensive AI buildout; a buyback increases the remaining owners' proportional stake; Taylor Morrison adds an operating business whose economics can be judged over years rather than trading days.

The same framework also explains why Berkshire can spend tens of billions and still be called conservative. A roughly $365 billion reserve leaves the company with extraordinary flexibility. If markets weaken, it can hold rather than sell. If a large acquisition appears, it can negotiate without depending on emergency financing. That optionality has economic value even when the cash itself earns less than a successful equity investment might.

Abel therefore faces two opposite risks. Moving too slowly could leave an enormous amount of capital earning modest returns for too long. Moving too quickly could turn the need to show a post-Buffett direction into pressure to accept weaker prices or lower-quality assets. The second quarter proves he is willing to act; it does not yet show where he will draw the line.

The next few Berkshire reports should make that line clearer. Investors can watch whether equity purchases continue to exceed sales, whether buybacks remain material, and whether additional operating-company deals follow Taylor Morrison. If deployment continues without materially weakening the liquidity cushion, 2026 may look like the beginning of a sustained new pace. If the company returns to cash accumulation, the quarter will instead show that Abel is willing to be active selectively and then wait again.