Berkshire Hathaway’s longtime edge over S&P 500 shows signs of eroding
For decades, investors viewed Berkshire Hathaway as a reliable way to outperform the broader stock market. But that assumption may need to be questioned. Technical analysts are increasingly pointing to signs that Berkshire’s shares are losing momentum relative to the S & P 500. A chart analysis by 22V Research of Berkshire’s performance relative to the benchmark index shows the stock has returned to levels against the S & P 500 last seen around 2007, suggesting little relative progress over nearly two decades. “Berkshire Hathaway was a good bellwether for the S & P, but that relationship appears to be changing,” 22V Research said in a note to clients. The comparison does not mean Berkshire shares have struggled in absolute terms. The sprawling conglomerate has climbed sharply over the period and sits just 6% below its all-time high reached in November. Instead, the data highlight a shift in relative performance: Berkshire is no longer consistently outpacing the broader market after decades of delivering superior returns under Warren Buffett. The divergence has become more notable in recent years as artificial intelligence-fueled enthusiasm has sent the technology heavyweights that dominate the S & P 500 soaring. Berkshire, while still holding a sizable stake in Apple , has largely abstained from investing in many of the market’s highest-flying AI beneficiaries. Some market observers also point to Berkshire’s record cash pile, which stood at nearly $400 billion in the first quarter. Bulls argue the cash provides ample firepower should markets stumble. Critics, however, see the enormous cash reserve as a potential drag when equities continue climbing. Under the new leadership of CEO Greg Abel, Berkshire has also only modestly resumed buybacks after a nearly two-year hiatus, disappointing some investors who had expected more aggressive repurchases given Berkshire’s vast liquidity. Shares of Berkshire are down about 4% year to date, compared to the S & P 500’s 9% gain. BRK.B YTD mountain Berkshire Hathaway Class B shares year to date Buffett, who stepped back from serving as CEO at the start of 2026, cautioned shareholders as long ago as 2023 in his annual letter that Berkshire’s size and composition make dramatic outperformance increasingly difficult. “With our present mix of businesses, Berkshire should do a bit better than the average American corporation and, more important, should also operate with materially less risk of permanent loss of capital,” Buffett wrote. “Anything beyond ‘slightly better,’ though, is wishful thinking.” The comment reflected Buffett’s view that Berkshire’s collection of mature, diversified businesses — from BNSF Railway to See’s Candies — should continue producing steady gains with lower risk, rather than delivering the outsized returns that defined much of its earlier history. Berkshire’s long-term record is difficult to match. Since Buffett took control of the company in the 1960s, the conglomerate has generated annual returns that have roughly doubled those of the S & P 500.
