Berkshire Hathaway's new CEO Greg Abel burned through more than $34 billion of the company's cash hoard in a single quarter — dropping $10 billion on Google's parent company and $4.5 billion on stock buybacks — while working Americans still can't catch a break from inflation and surging housing costs.
Berkshire's cash pile shrank from nearly $400 billion at the end of March to $365.5 billion by the end of the second quarter, according to earnings reported Saturday. That's a staggering sum being deployed in a single quarter, and where it went tells you everything about who the system rewards.
The company dumped $10 billion into Alphabet, Google's parent — a Big Tech firm that has spent years consolidating control over the digital public square. Berkshire also added more than $24 billion worth of commercial, industrial, and other stocks to its portfolio, though the specific names won't be disclosed until a later filing. Meanwhile, Berkshire completed a $6.8 billion acquisition of homebuilder Taylor Morrison in July — a deal that won't show up until next quarter's numbers. A homebuilder. At a moment when housing affordability is crushing American families.
On the buyback front, Abel spent $4.5 billion repurchasing Berkshire's own shares — money that flows straight to investors, not to workers, not to lowering prices for consumers. Even that fell short of Wall Street's expectations. Analysts had predicted repurchases between $5 billion and $11 billion, according to the Associated Press. The buybacks came mostly in June, and they may already be tapering off now that Berkshire stock hit a new 52-week high.
Abel took over as CEO in January after Warren Buffett retired following six decades at the helm. Buffett remains chairman. The buyback standard under both men is straightforward: they only repurchase shares when they believe the stock is selling for less than it's worth. It's a bet on themselves, not on the broader economy.
Berkshire's bottom-line profit more than doubled to $25.667 billion, largely on paper gains from investments as the company cycled past last year's $3.8 billion writedown on its Kraft Foods stake. But Buffett has long said the real measure is operating earnings, which strip out investment swings. By that metric, operating profit grew to $12.983 billion from $11.16 billion a year ago — solid, but hardly the doubling the headline number suggests.
Berkshire owns Geico, BNSF railroad, major utilities, and a roster of manufacturing and retail businesses. These are companies that touch ordinary Americans every day — the insurance premiums they pay, the freight costs baked into the goods they buy, the utility bills that keep climbing. Yet the cash gets funneled to Big Tech and buybacks.
The question neither outlet asked: when a company sits on $365 billion and chooses to park it in Google and its own stock, what does that say about where the American economy is headed — and who it's built to serve?
