Buffett Steps Down

Key Takeaways

• Buffett to Step Down as CEO: Warren Buffett will retire as Berkshire Hathaway (BRK.A) CEO at the end of 2025, with Greg Abel set to take over.
• Earnings Disappoint: Q1 2025 earnings dropped sharply, net earnings down 64%, and operating profits down 14%.
• Cash Hits Record, Stock Sales Slow: Berkshire’s cash hoard reached a record $347 billion, while stock sales slowed significantly.

Buffett to Step Down as CEO, Berkshire Hathaway Misses on Earnings

Warren Buffett will step down as CEO of Berkshire Hathaway at the end of 2025, naming Greg Abel, vice chairman of noninsurance operations, as his successor. The announcement came in the final minutes of Saturday, Berkshire’s 60th annual shareholder meeting. While Buffett, 94, will relinquish operational control, he will remain chairman, a unanimously approved position by Berkshire’s board on Sunday.

Abel, Buffett’s publicly acknowledged heir since 2021, will assume the CEO role on January 1, 2026. Buffett said he intends to “still be around” and contribute where helpful, especially in moments of major market opportunity. Shareholders appeared to welcome the continuity, but Berkshire shares slipped 6% in early Monday trading before partially recovering.

Earnings Slide Amid Wildfires, Equity Losses

The leadership shift overshadowed Berkshire’s weaker-than-expected Q1 2025 results. Net earnings per Class B share (BRK.B) dropped 64% to $2.13, while operating earnings fell 14% to $9.641 billion. Investment losses of $5.04 billion weighed heavily, and insurance underwriting profits declined 49%, in part due to a $1.1 billion loss tied to Southern California wildfires. Currency exchange losses further dragged down earnings.

Despite the quarterly setback, Berkshire’s broad business portfolio—including Geico, BNSF Railway, and Dairy Queen—continues to offer a defensive edge in uncertain markets.

Stock Sales Slow, Cash Hits Record $347 Billion

Berkshire was a net seller of stocks for the 10th straight quarter but scaled back significantly from previous periods. The firm sold $4.68 billion in equities while buying $3.18 billion, resulting in net sales of $1.5 billion, down sharply from $17.3 billion in Q4 2024. During the final quarter of 2024, Berkshire sold several stocks, including Bank of America (BAC). Apple (AAPL) remains Berkshire’s top holding. Berkshire’s portfolio moves for Q1 will be reported around May 15.

Berkshire ended Q1 with a record $347 billion in cash, now comprising roughly 32% of its $1.1 trillion market cap. Berkshire’s equity holdings dropped to $263.7 billion from $271.6 billion at the end of 2024. The conglomerate made no share repurchases for a third straight quarter, further emphasizing its cautious positioning amid market uncertainty.

Buffett’s Legacy and Abel’s Future

Buffett emphasized in his February shareholder letter that Berkshire’s privately held businesses remain far more valuable than its marketable stock portfolio. The leadership transition reinforces the company’s strategy of long-term value investing and conservative capital deployment.

Investors view Abel as a capable successor, and Buffett’s continued role as chairman is expected to ease the shift. “If we ran into periods of great opportunity, I could be helpful,” Buffett said.