Berkshire Hathaway rises as investors cheer strong earnings and Buffett's near-record cash stockpile

Berkshire Hathaway shares climbed on Monday following a strong quarterly report that showed a rebound in insurance operations as well as a massive cash hoard that swelled to nearly $150 billion.

Class B shares of Warren Buffett‘s conglomerate rose 1.6% in premarket trading, on track to trade near an all-time closing high. The Omaha-based giant reported on Saturday that its operating earnings jumped 6.6% year over year, totaling $10.04 billion last quarter.

Insurance underwriting earnings recorded a 74% increase to $1.25 billion, benefitting from higher interest rates and lower catastrophe losses. The solid performance in insurance helped offset the softness in railroad due to lower volumes.

Meanwhile, Berkshire’s massive cash pile grew to $147.38 billion at the end of June, near a record and much higher than the $130.62 billion in the first quarter.

Elevated interest rates are now enabling Berkshire to earn a hefty return from its cash. The conglomerate held more than $97 billion in short term Treasury bills. Buffett previously revealed that he’s been buying $10 billion worth of 3-month or 6-month T-bills every Monday.

“Berkshire Hathaway’s resilient earnings illustrated the value of its diversified business mix as it added to its cash hoard,” said Bill Stone, chief investment officer at Glenview Trust and a Berkshire shareholder. 

Berkshire also reported a near $26 billion unrealized gain from its investments, and much of this gain came from its gigantic stake in Apple. The tech giant fueled the market rally in the second quarter, climbing nearly 18%. Berkshire’s Apple bet has ballooned to $177.6 billion.

Berkshire’s Class A shares hit a new record close of $541,000 on Thursday, exceeding the conglomerate’s previous high of $539,180 reached on March 22, 2022. The stock has gained 13.8% this year.

“We continue to believe BRK’s shares are an attractive play in an uncertain macro environment,” Brian Meredith, a Berkshire analyst at UBS, said in a note.