Berkshire Hathaway has delivered a staggering return of nearly 6,100,000% from 1964 to 2025, but its recent decade shows a more modest performance, with a 240% increase in share price over the last ten years, compared to the S&P 500’s 282%. This underperformance can be attributed to the company’s cautious approach to technology investments and a significant cash reserve, which has hindered returns.
Despite the criticism, Berkshire’s earnings per share (EPS) have surged 218% from 2015 to 2025, indicating that profit growth has been the primary driver of its stock performance rather than valuation expansion. The current price-to-earnings (P/E) ratio stands at 15.4, slightly higher than a decade ago, suggesting that investors are not relying on multiple expansion for future gains.
As new CEO Greg Abel takes the helm, market professionals should watch for strategic shifts that could enhance Berkshire’s growth trajectory and potentially narrow the gap with broader market returns.
Source: fool.com