"The first full quarter under new CEO Greg Abel saw significant shifts, including the complete exit of 16 positions and a tripling of the stake in Alphabet."
Berkshire Hathaway's investment portfolio has undergone significant changes in the first quarter of 2025, the first full quarter under new CEO Greg Abel. Abel succeeded Warren Buffett, who retired as CEO on December 31, 2023, and remains chairman of the board. The company's stock portfolio was valued at approximately $318 billion at the end of the fourth quarter of 2023 and $280 billion in the first quarter of 2025.
Portfolio Restructuring in Q1 2025
According to the company's 13F filing for the first quarter of 2025, Abel executed a series of sales and new investments.
Divestments and Reductions
Berkshire completely exited 16 positions, including:
- Amazon (AMZN): Sold entirely after a 77% reduction in the previous quarter.
- Domino's Pizza (DPZ): Sold after six consecutive quarters of purchases.
- Visa and Mastercard: Both sold.
- UnitedHealth Group: Sold.
- Chevron (CVX): Stake reduced by 35%.
New and Increased Holdings
- Alphabet Inc. (GOOGL, GOOG): Berkshire tripled its stake in Class A shares (36,403,656 shares purchased) and added 3,585,215 Class C shares. The total stake was valued at approximately $23 billion. This follows an increase from 17.8 million shares worth $5.6 billion in December to nearly 58 million shares worth $17 billion by March.
- Delta Air Lines: A new position of approximately 40 million shares was acquired, valued at over $2.6 billion.
- Macy's: A new position worth nearly $55 million.
- The New York Times Co.: Stake nearly tripled.
Rationale for Changes
Reporting from financial sources attributes the sale of Amazon to valuation concerns. The sale of Domino's Pizza was linked to inflation's impact on consumers; the company reported subpar same-store sales growth in the U.S. (0.9%) and a decline in international same-store sales (-0.4%) in Q1. The increased stake in Alphabet reflects a focus on its search business, YouTube, and Google Cloud services, which saw 63% year-over-year growth in Q1.
Concentrated Portfolio Composition
The fourth-quarter 2023 13F filing indicated that approximately 61% of Berkshire's invested assets were concentrated in five primary stocks:
- Apple (AAPL)
- American Express (AXP)
- Coca-Cola (KO)
- Bank of America (BAC)
- Chevron (CVX)
Long-Term Holdings (Indefinite Holdings)
In his 2023 letter to shareholders, Warren Buffett identified eight companies as indefinite holdings. Coca-Cola and American Express have been continuous holdings since 1988 and 1991, respectively.
- Coca-Cola (KO): Cost basis of approximately $3.25 per share. The current annual yield on cost is estimated at 63%.
- American Express (AXP): Cost basis of approximately $8.49 per share. The current annual yield on cost is estimated at 39%.
Both companies are described as providing substantial annual yields relative to their cost basis, indicating no logical incentive for sale from a financial standpoint.
Valuation and Potential Adjustments
Analysts and reports suggest that some portfolio adjustments may occur due to changes in valuation.
- Apple (AAPL): Berkshire's trailing 12-month price-to-earnings (P/E) ratio for Apple has nearly tripled since the initial purchase in Q1 2016, now standing at 34. The company has experienced periods of weakness in physical device sales. Berkshire has reduced its Apple stake by about 75% in recent years.
- Bank of America (BAC): When Berkshire initiated a position in the company's preferred stock in August 2011, its common stock traded at a 62% discount to its book value. It currently trades at a 31% premium to its book value.
Energy Sector Focus
Berkshire has made significant investments in the oil and gas sector, totaling at least $58 billion. This includes:
- Building significant positions in Chevron and Occidental Petroleum.
- Acquisition of Dominion Energy's natural gas and storage assets in 2020, valued at nearly $10 billion.
- Purchase of a 50% stake in the Cove Point LNG facility from Dominion Energy for $3.3 billion in July 2023.
- Acquisition of the remaining 8% of Berkshire Hathaway Energy for approximately $2.4 billion in October 2024.
- Acquisition of Occidental Petroleum's petrochemical division, OxyChem, for about $9.7 billion in cash in 2025.
Chevron may become a foundational holding. Greg Abel's background includes serving as CEO of MidAmerican Energy (now Berkshire Hathaway Energy), which provides familiarity with the energy sector. Chevron's integrated operating model (pipelines, chemical plants, and refineries) is noted as a hedge against fluctuations in crude oil spot prices.
CEO's Stated Investment Strategy
In his inaugural annual letter to shareholders, Greg Abel specifically identified four stocks as "businesses we understand well, have a high regard for their leaders, and expect will compound over decades." He indicated an expectation of "limited activity in these holdings."
Holding Portfolio Weight Notes Apple (AAPL) 18.9% First acquired in 2016; noted for conservative AI development and share buybacks. American Express (AXP) 14.7% Consistent holding since 1964; noted for its closed-loop payment network. Coca-Cola (KO) 10.2% Defensive consumer staple; Dividend King with 63 consecutive years of dividend increases. Moody's (MCO) 3.7% Eighth-largest holding; acquired in 2000. One of three major entities controlling ~95% of the regulated corporate debt ratings market.Market Reaction and Context
Following the Q1 2025 13F disclosure, Macy's and Delta stock prices rose, while Alphabet's stock showed minimal change. The departure of investment manager Todd Combs occurred late last year. Berkshire's Q1 2025 filing reflects the first quarter of portfolio management under Abel, with Buffett seated among the board during Abel's first shareholders meeting as CEO. Berkshire did not comment on the portfolio changes.